                 IN THE COURT OF APPEALS OF TENNESSEE
                             AT NASHVILLE
                                      July 9, 2003 Session

            OVERNITE TRANSPORTATION COMPANY
                               v.
    TEAMSTERS LOCAL UNION NO. 480, AFFILIATED WITH THE
 INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS,
   WAREHOUSEMEN AND HELPERS OF AMERICA, AFL-CIO; AND
     BILLY D. CULLEN; EDDIE MIMS; KENNIE GEORGE; ISOM
 (“BUTCH”) FOLSOM, INDIVIDUALLY AND IN THEIR CAPACITY AS OFFICERS
      AND MANAGING AGENTS OF TEAMSTERS LOCAL UNION 480; AND
                     SEVERAL JOHN DOES

                  An Appeal from the Chancery Court for Davidson County
                       No. 99-3105 III   Ellen H. Lyle, Chancellor


                   No. M2002-02116-COA-R3-CV - Filed February 27, 2004


This case arose out of a labor dispute. In October 1999, the defendant union began a labor strike at
the plaintiff trucking company’s Nashville facility. The company filed a petition in the lower court
seeking to enjoin the union from engaging in violence and intimidation in connection with the strike.
The company later amended its complaint to include a claim against the union for intentional
interference with business relations. Between October 1999 and January 2000, the trial court entered
five injunctions against the union, each more restrictive than the one before, enjoining the union
from engaging in the alleged unlawful violence and intimidation. In August 2000, the trial court
issued a show cause order, citing 128 alleged violations of the injunctions, requiring the union to
show cause why it should not be held in civil contempt. In March 2002, the trial court determined
that the company’s petition for civil contempt was moot because, by that time, the contemptuous
conduct had ceased. In August 2002, the trial court dismissed the company’s claim for intentional
interference with business relations for failure to state a claim. The plaintiff trucking company now
appeals. We reverse the dismissal of the civil contempt petition, finding that the company may seek
damages caused by conduct in violation of the injunctions, and affirm the dismissal of the intentional
interference claim.

 Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed in part
                          and Reversed in part and Remanded
HOLLY M. KIRBY , J., delivered the opinion of the court, in which ALAN E. HIGHERS, J., and DAVID
R. FARMER , J., joined.

Kenneth A. Weber, Nashville, Tennessee; and Christopher A. Johlie and Melissa Crawford Mazzeo,
Chicago, Illinois, for the appellant, Overnite Transportation Company.

James G. Stranch, III, and Mark A. Mayhew, Nashville, Tennessee, for the appellee, Teamsters Local
Union No. 480.

George E. Barrett, Nashville, Tennessee, for the individual appellees, Billy D. Cullen, Eddie Mims,
Kennie George, Isom (“Butch”) Folsom.

                                                   OPINION

       Plaintiff/Appellant Overnite Transportation Company (“Overnite”) is a trucking company
based in Richmond, Virginia. Overnite operates a service center in LaVergne, Tennessee, near
Nashville (“the Nashville facility”). Defendants/Appellees, Teamsters Local Union No. 480 (“the
Union”), is affiliated with the International Brotherhood of Teamsters, Chauffers, Warehousemen,
and Helpers of America. The four individuals, Defendants/Appellees Billy Cullen, Eddie Mims,
Kenny George, and Isom “Butch” Folsom (collectively, “individual defendants”), were sued in their
individual capacities and as officers of the Union.

         This case arises out of the Union’s lengthy campaign to represent Overnite employees in
collective bargaining. In 1995, a representation election was conducted at Overnite’s Nashville
facility for Overnite employees to vote on whether the Union would represent them in collective
bargaining with Overnite’s management. The Union lost the election, and consequently filed an
election protest with the National Labor Relations Board (“NLRB”). The NLRB set aside the
election and ordered Overnite to bargain with the Union without conducting a new election. See In
re Overnite Transp. Co., 1999 WL 33453666 (NLRB July 13, 1999), and In re Overnite Transp.
Co., 2001 WL 946528 (NLRB August 16, 2001). The NLRB’s order was appealed to the United
States Court of Appeals for the Fourth Circuit.

        While the appeal of the NLRB order was pending,1 Overnite and the Union engaged in
collective bargaining. After numerous bargaining sessions between Overnite and the Union, the
parties could not resolve their differences. Consequently, on October 24, 1999, the international
Teamsters organization commenced a nationwide strike against Overnite. The local chapter of the
Union at the Nashville facility actively participated in the strike and set up picket lines there. Within
hours of commencement of the strike, numerous incidents involving violence, weapons, and threats


        1
           The appeal was decided in 2002. On appeal, the Fourth Circuit Court of Appeals determined that, although
Overnite had violated the National Labor Relations Act (“NLRA”), a mandatory bargaining order was not an appropriate
remedy because of the number of employees hired since the election. See Overnite Transp. Co. v. NLRB, 240 F.3d 325
(4th Cir. 2001), rev’d, 280 F.3d 417 (4th Cir. 2002) (en banc).

                                                        -2-
began to occur, with the apparent objective of intimidating Overnite employees who crossed the
picket line in order to work.

        On October 27, 1999, Overnite filed the instant lawsuit seeking injunctive relief against the
Union, as well as actual and punitive damages. At a hearing held on October 29, 1999, Overnite
submitted an amended complaint with attached affidavits alleging that Union members were
brandishing guns and knives, blocking and damaging vehicles as they were being driven in and out
of the facility, and threatening to harm workers physically who attempted to cross the line.2 At the
conclusion of the hearing, the trial court issued a temporary injunction order. In that order, the trial
court prohibited the Union and its supporters from making contact with Overnite employees or
equipment; required the Union to designate a responsible leader; and required the Union to reduce
its mass of picketers to a reasonable number.

         Despite the injunction, incidents of violence and intimidation escalated.3 On November 4,
1999, Overnite filed a motion seeking to require the Union to show cause why it should not be held
in contempt of court for violating the October 29, 1999 order, and also to modify the injunction to
place more restrictions on the Union. In support of its motion, Overnite submitted videotaped
footage of some of the conduct of which it complained. On the same day, the trial court dissolved
its original order and issued a second, more restrictive temporary restraining order. The trial court
noted that it had “not heard the Teamsters’ side,” but concluded that a restraining order was
necessary to prevent irreparable harm to persons and property. A hearing was set for November 8,
1999, to determine whether an even more restrictive temporary injunction was warranted.

        The second injunction apparently did little to curb the misconduct. The next day, on
November 5, 1999, Overnite filed an “emergency” motion to require the Union to show cause why
it should not be held in contempt for violating the trial court’s November 4, 1999 order, and
requesting further modification of the temporary injunction. Overnite presented evidence of gun
shots, bomb threats, and more window-shattering activity.4 On the same day, the trial court entered
an order supplementing its previous order. The trial court found that the evidence submitted by


         2
           The affidavits by Overnite employees alleged that Union representatives cursed at them and threatened them
with bodily harm, wielding knives and guns and warning them not to cross the picket line. Another affidavit alleged that
Union representatives pulled their cars in front of Overnite trucks and slammed on their brakes, causing the Overnite
employees also to slam on their brakes to avoid an accident. Still another affidavit alleged that Union representatives
may have been responsible for putting a bullet hole in an Overnite employee’s windshield.

         3
             Overnite alleged that the Union exceeded the number of pickets as set forth in the temporary injunction, and
that it also failed to report their picket line leaders to Overnite security guards as required by the injunction. In addition,
Overnite alleged that Union members continued to shatter windows of personal vehicles belonging to Overnite
employees, throw objects at the employees, and strike Overnite trucks with sticks and pickets.

         4
           Among other things, firecrackers were set off during the evening of November 4 and the morning of November
5, 1999, and gunshots were fired at two portable lights that had been placed just inside the entrance gate to the facility.
Also, an Overnite dispatcher received a bomb threat, requiring evacuation of the Overnite Service Center while police
searched the premises.

                                                             -3-
Overnite established incidents of criminal activity, but did not link the criminal activity to the local
Teamsters group. The trial court stated in its order that a court is “not the entity designated to halt
such essentially anonymous criminal activity,” and that “[a]n injunction is not the way to stop
crime.” Nevertheless, the November 4 restraining order remained intact and further restrictions were
placed on the Union. On November 8, 1999, after a hearing, the trial court converted the November
5 and 6 temporary restraining orders into a temporary injunction.

        On November 24, 1999, Overnite filed another motion to modify the temporary injunction
and to address further unlawful conduct since the entry of the November 8 order. Like the previous
motions, the November 24 motion requested that the Union be required to show cause why it should
not be held in contempt of court. On January 14, 2000, the trial court granted Overnite’s motion to
modify the injunction and, for the fifth time, added further restrictions. The trial court denied
Overnite’s request for a show cause order with respect to criminal contempt charges, finding that
Overnite had failed to proffer particularized facts linking the alleged misconduct to the local
Teamsters organization. The trial court also denied Overnite’s request for a show cause order with
respect to civil contempt, stating that Overnite had failed to specify the particular damages it
suffered, as well as the amount of such damages, and did not show that the Union was responsible
for the damages.

        On January 21, 2000, Overnite filed a motion to amend its complaint to add a claim for
intentional interference with business relationships, and also to add as defendants the four individual
members of the Union named above, Cullen, Mims, George, and Folsom, alleging that they
participated in the strike misconduct.5 On February 4, 2000, the trial court granted Overnite’s
motion to amend.

        In February 2000, the Union learned that the bond posted by Overnite for the initial
injunction was untimely and substantively defective under Rule 65 of the Tennessee Rules of Civil
Procedure.6 Consequently, on February 14, 2000, in the pleading filed by the Union in opposition
to Overnite’s petition for contempt, the Union raised the issue of the defective bond. The Union
alleged that the bond posted by Overnite was not an injunction bond, but was actually a cost bond.
It argued that the failure to file a proper bond voided any injunction orders issued by the trial court
and, therefore, barred any contempt proceedings. On March 10, 2000, without conceding the merits
of the Union’s position, Overnite filed an amended bond. On March 14, 2000, the trial court entered
an order rejecting the Union’s argument regarding the defective bond, noting that Rule 65.05(3) of
the Tennessee Rules of Civil Procedure provides a means by which a party can challenge the


         5
             The claim for intentional interference with business relations had been alleged against the Union and the
individual defendants in a separate action filed in a Davidson County Circuit Court in November 1999. In January 2000,
the defendants in that case filed a motion to dismiss based on the doctrine of former suit pending, citing the case at bar
as the first suit filed. In light of that motion, Overnite was permitted to combine its circuit court action with this case
and, to that end, filed the January 2000 motion to amend.

         6
         The Union claims that it was unable to obtain a copy of the bond from the court clerk’s office until February
2000, because the file was not lodged with the clerk & master, but was with the court.

                                                           -4-
sufficiency of a bond. On this basis, the trial court held that the Union was foreclosed at that late
date from challenging the sufficiency of the bond.

         On March 27, 2000, the Union filed an answer to Overnite’s complaint, asserting several
affirmative defenses.7 Among other things, the Union contended that Overnite’s claim was
preempted by federal law, and that the lawful publication of its grievances against Overnite was
protected speech under the federal and state constitutions. The Union maintained that no valid
injunction had ever been entered against it, since Overnite failed to file a valid injunction bond as
required under Rule 65 of the Tennessee Rules of Civil Procedure. In addition, the Union claimed
that Tennessee does not recognize a claim for intentional interference with business relationships
or, in the alternative, that such a claim would also be preempted by federal law.

        On June 23, 2000, Overnite filed an amendment to its motion for an order to show cause,
attaching affidavits detailing 131 specific allegations of contemptuous conduct by the Union. On
August 4, 2000, the trial court entered an order finding that Overnite had presented sufficient
evidence to require the Union to show cause why it should not be held in criminal contempt for 128
of the alleged violations.8

       On November 21, 2000, the trial court entered an order concluding that Overnite was entitled
to seek compensatory damages resulting from the Union’s contemptuous conduct, pursuant to
Tennessee Code Annotated § 29-9-105. This statute provides:

         If the contempt consists in the performance of a forbidden act, the person may be
         imprisoned until the act is rectified by placing matters and person in status quo, or
         by the payment of damages.

Tenn. Code Ann. § 29-9-105 (2000). The trial court reasoned that the plain language of the statute
provides for damages as a remedy, and that Tennessee case law also supported Overnite’s claim.
The trial court reiterated its previous rejection of the Union’s argument that Overnite’s failure to post
an adequate bond rendered the injunctions void. The trial court recognized that, in some
jurisdictions, the failure to post an adequate bond makes an injunction void ab initio; in other
jurisdictions the injunction is merely voidable. The trial court adopted the reasoning that such an
injunction is voidable, not void, and is enforceable even if the bond posted in support of it was
inadequate. In addition, the trial court stated that it would consolidate the hearing on the criminal
contempt charge with the hearing on Overnite’s petition to recover damages. The Union filed an
application for an interlocutory appeal from the trial court’s order, but the application was denied
by this Court.


         7
           The answer was titled “Answer of Defendants,” which presumably included the individual defendants as well
as the Union.

        8
          Three of the alleged violations were not included because those allegations did not indicate that the local
Teamsters organization participated in that conduct.

                                                        -5-
         On January 21, 2001, the District Attorney General for Davidson County submitted a notice
to the trial court that it declined to prosecute the criminal contempt charges. On June 19, 2001, the
trial court set a trial date of April 1, 2002 for the civil contempt charges. On January 18, 2002, the
Union filed a motion to dismiss or, in the alternative, for summary judgment. On the same day, the
individual defendants also filed a motion to dismiss or for summary judgment, adopting and
incorporating by reference the motion filed by the Union. In its motion, the Union claimed, among
other things, that Overnite was not entitled to recover damages for civil contempt, because it sought
retrospective punishment instead of prospective remedial action. The Union maintained that
“compensatory civil contempt” was not recognized in Tennessee and that, therefore, Overnite’s
claims should be dismissed.9

         On March 12, 2002, the trial court entered an order granting in part the Union’s motion for
summary judgment. The trial court dismissed Overnite’s petition for civil contempt as moot,
because it was undisputed that the picketing had not been in place for over a year prior to the trial
court’s decision. The trial court recognized its previous November 2000 ruling “that compensatory
damages are recoverable in an action for civil contempt pursuant to section 29-9-105.” The trial
court noted, however, that “[t]he facts . . . in the case at bar have changed.” The trial court reasoned
that, “since the strike is no longer being conducted, action taken by this Court on the contempt
petition would not be coercive and remedial (i.e. civil contempt) but in the nature of a punishment
(i.e. criminal contempt).” Therefore, the trial court concluded that the petition for civil contempt was
moot.

         On August 9, 2002, the trial court entered an order dismissing Overnite’s claim for
intentional interference with business relationships.10 Overnite had stipulated that it was not
asserting a cause of action for interference with prospective economic advantage, but rather that the
Union had interfered with Overnite’s relationship with its employees and the security guards it had
hired to protect the employees from violence. The trial court concluded that Overnite’s cause of
action was actually a claim of inducement to breach a contract. Because Overnite made no allegation
that it had incurred damages resulting from a breach of contract – a necessary element in a claim for
inducement to breach – the trial court concluded that the averment failed to state a claim for relief.
The trial court concluded, in the alternative, that, even if a proper claim for inducement to breach
had been asserted, summary judgment should be granted to the Union, because Overnite submitted
no evidence of a breach of contract. The trial court added that, to the extent that Overnite sought
recovery of economic damages resulting from intentional interference with business relations, such
a claim would have been preempted by federal law. The trial court’s order dismissed all of
Overnite’s claims as to all defendants, stating explicitly that it was a final order. Overnite filed this
timely appeal.


        9
          The Union did not reassert that the failure to post an adequate bond invalidated the trial court’s
injunction orders.
        10
           The trial court also dismissed Overnite’s “damage to personal property” claim, finding that there was no
such action in Tennessee law. It opined, however, that such a claim would not be preempted by federal law.

                                                       -6-
        On appeal, Overnite first argues that the trial court erred in dismissing its claim for
compensatory damages resulting from the Union’s civil contempt. Overnite asserts that recovery
for damages caused by the Union’s contemptuous conduct is authorized under Tennessee Code
Annotated § 29-9-105, regardless of whether the Union members continued to engage in conduct in
contempt of the injunctive orders. Overnite also argues that the trial court erred in dismissing its
intentional interference claim, contending that a breach of contract is not an element of such a cause
of action. Overnite contends further that the trial court erred in determining that its claim for
intentional interference would be preempted by federal law.

        In response, the Union argues that the trial court correctly dismissed Overnite’s claims. The
Union asserts, however, that the trial court should have also dismissed Overnite’s petition for
contempt because the defective bond posted by Overnite rendered the injunctions void. The Union
also maintains that the trial court was correct in dismissing Overnite’s claim for intentional
interference with business relationships, because that claim is preempted by the federal law,11 and
because the evidence was insufficient to support such a claim. The individual defendants filed an
appellate brief on their own behalf, arguing that, because the show cause order issued by the trial
court applied only to the Union, the individual appellees were never a party to the civil contempt
proceedings. Second, the individual defendants argue that, because Overnite failed to respond to
their motion to dismiss or for summary judgment, their motion should have been granted on this
basis.

        The trial court’s factual findings are reviewed de novo on the record with a presumption of
correctness, unless the preponderance of the evidence is otherwise. Reed v. Hamilton, 39 S.W.3d
115, 117 (Tenn. Ct. App. 2000); Tenn. R. Civ. P. 13(d). The trial court’s conclusions of law are
reviewed de novo, with no such presumption. Reed, 39 S.W.3d at 117. Issues of statutory
interpretation and the application of a statute to particular facts involve questions of law, which are
subject to de novo review. Shelton v. ADS Environmental Serv., 100 S.W.3d 214, 216 (Tenn.
2003); Ganzevoort v. Russell, 949 S.W.2d 293, 296 (Tenn. 1997).

        We first address Overnite’s claim for damages under Tennessee Code Annotated § 29-9-105,
which states that if the contemptuous conduct is the performance of a forbidden act, “the person may
be imprisoned until the act is rectified . . . by the payment of damages.” Tenn. Code Ann. § 29-9-
105 (2000). The trial court concluded in its November 21, 2000 order that section 29-9-105
authorizes the recovery of compensatory damages in a contempt proceeding when the contempt
involves the performance of a forbidden act. Citing several cases, the trial court reasoned that
damages under the statute are compensatory in nature, serving to compensate the aggrieved party for
losses sustained as a result of wrongful and contemptuous actions. Later, in its March 12, 2002
order, the trial court acknowledged its previous ruling, but noted that “[t]he facts . . . in the case at
bar have changed.” Because the Union had no pickets in place for over a year, and the contemptuous
conduct had therefore ceased, the trial court deemed the petition for civil contempt to be moot.


         11
            Though the Union argued in the trial court that the petition for civil contempt was preempted by federal law,
it has not made that argument on appeal.

                                                          -7-
Thus, when the trial court’s orders are read together, it concluded that compensatory damages under
section 29-9-105 are available only when the contemptuous conduct is ongoing and the award of
such damages would serve to coerce the contemnor into compliance with the court’s order.

        As noted by the trial court, a petition for civil contempt compels “the doing of something by
the contemnor, which, when done, will work his discharge.” Shiplet v. State, 400 S.W.2d 542, 543
(Tenn. 1966). An essential element of civil contempt is the ability of the contemnor to comply with
the order at the time of the contempt and be able to purge himself of the contempt. Ahern v. Ahern,
15 S.W.3d 73, 79 (Tenn. 2000). The contemnor has the “keys to the jail,” which means he can purge
his contempt by complying with the court’s order. Id. On the other hand, criminal contempt is
“punitive in character, and the proceeding is to vindicate the authority of the law and the court as an
organ of society.” Id. “[A] fine levied after the contemnor defies a threat imposed to deter future
conduct” has the attributes of a criminal sanction. Young v. Young, No. 01-A-01-9609-CV-00415,
1997 WL 107159, at *1 n.1 (Tenn. Ct. App. Mar. 12, 1997).

        The Union argues that, in this case, any monetary award could only be punitive, not coercive,
since it is undisputed that, by the time of the hearing on damages, the contemptuous conduct had
ceased. Therefore, as found by the trial court, an award of civil contempt sanctions at that point
would have been fruitless, and section 29-9-105 does not authorize criminal sanctions.

        The Union concedes that there may be situations in which contempt remedies sound in both
civil and criminal contempt. It asserts, however, that section 29-9-105 does not apply in cases
involving labor dispute injunctions, because contempt arising from a Union’s violations of an
injunction is always “criminal rather than civil in nature.” See Strunk v. Lewis Coal Co., 547
S.W.2d 252, 253 (Tenn. Crim. App. 1976); Nashville Corp. v. United Steelworkers of America, 215
S.W.2d 818, 820 (Tenn. 1948) (holding that the union’s violation of an injunction “falls under the
criminal class as distinguished from civil”). In Strunk, the trial court issued an injunction
prohibiting the union from engaging in violence or mass picketing. The union violated that order,
and the coal company filed a petition for contempt. On appeal was the single issue of whether the
trial court had applied the appropriate standard of proof in determining guilt. Strunk, 547 S.W.2d
at 253. In deciding the issue, the trial court determined that the contempt alleged was criminal in
nature, rather than civil, “regardless of the fact that the original proceeding was brought in a court
of equity.” Id. The Union cites this authority as establishing that the violation of an injunction in
a labor dispute is always criminal in nature, and that civil remedies are therefore not available.

        However, the cases upon which the Union relies do not discuss the application of the section
29-9-105, nor do they support the Union’s broad assertion that all contempt petitions in labor
disputes must be deemed criminal in nature. Rather, cases addressing the applicability of section 29-
9-105 indicate that, when a party violates an order forbidding the performance of a certain act, the
statute authorizes the person injured by contemptuous conduct to file a petition for civil contempt
and to request that the party in contempt be imprisoned “until the act is rectified . . . by the payment
of damages.” Tenn. Code Ann. § 29-9-105 (2000) (emphasis added). The trial court recognized the
effect of this provision in its November 2000 order, citing several cases in which courts have


                                                  -8-
assessed compensatory damages in a civil contempt proceeding for injury arising out of the
contemnor’s disobedience.

         For example, in Reed v. Hamilton, 39 S.W.3d 115 (Tenn. Ct. App. 2000), the plaintiffs filed
a declaratory judgment action, requesting a declaration that an easement existed over the defendants’
real property for the benefit of the plaintiffs, in order to afford the plaintiffs access to their own
property.12 Soon after the lawsuit was filed, the trial court issued a temporary restraining order
enjoining the defendants “from interfering, obstructing, or preventing” the plaintiffs from using the
claimed easement. Reed, 39 S.W.3d at 116. Later, the plaintiffs filed separate petitions for
contempt, alleging that the defendants had violated the restraining order by depriving them of the
use of the easement and access to their properties. The trial court held a hearing and determined that
the defendants had, in fact, willfully violated its previous order. Id. at 117. Subsequently, the trial
court entered an order finding that the defendants were in civil contempt of court, but concluding that
the plaintiffs had not sustained any actual damages as a result of the defendants’ actions. However,
the trial court awarded the plaintiffs attorney’s fees as “sanctions and damages” under section 29-9-
105. Id.

        On appeal, the Reed defendants challenged the trial court’s authority to assess “sanctions and
damages” against them in the civil proceedings, particularly in light of the court’s finding that no
actual damages had been suffered. The defendants argued that, under Tennessee Code Annotated
§ 29-9-103, the trial court was not authorized to impose a fine for civil contempt over $50.13 The
appellate court disagreed, concluding that the damages awarded were recoverable under section 29-
9-105:

         As a direct result of the [defendants’] actions, [the plaintiffs] were forced to incur
         attorney’s fees associated with the filing of petitions for contempt and hearings
         subsequently held thereon. As noted by this Court in [Keeley v. Massey, No. 02A01-
         9307-CH-00159, 1994 WL 59556 (Tenn. Ct. App. Feb. 28, 1994)], damages under
         section 29-9-105 are compensatory in nature. The trial court’s award of attorney’s
         fees served to compensate [the plaintiffs] for the loss they sustained as a result of the
         wrongful and contemptuous actions of the [defendants]. Under such circumstances,


         12
             The trial court cited the Reed decision in support of its November 2000 decision, but did not give the case
authoritative weight because the case was unpublished at that time.

         13
              That statute provides:

         (a) The punishment for contempt may be by fine or by imprisonment, or both.

         (b) W here not otherwise specially provided, the circuit, chancery, and appellate courts are limited to
         a fine of fifty dollars ($50.00), and imprisonment not exceeding ten (10) days, and, except as provided
         in § 29-9-108, all other courts are limited to a fine of ten dollars ($10.00).

Tenn. Code Ann. § 29-9-103 (2000).



                                                          -9-
        we think that the court properly concluded that the attorney’s fees incurred by [the
        plaintiffs] are among the types of damages that are compensable under section 29-9-
        105.

Id. at 120. Thus, the court held that damages under section 29-9-105 are available to compensate
an injured party for injuries caused by contemptuous conduct.

        In reaching this conclusion, the Reed court relied on two cases, Keeley v. Massey, No.
02A01-9307-CH-00159, 1994 WL 59556 (Tenn. Ct. App. Feb. 28, 1994), and Kuykendall v.
Latham, 1991 WL 10178 (Tenn. Ct. App. Feb. 4, 1991). In Keeley, the appellate court upheld an
award of attorney’s fees as damages arising out of the contemnor’s disobedience. The Keeley court
opined that “the chancellor was vested with the power to assess damages under T.C.A. § 29-9-105.
Damages are to be compensatory in nature, and the appropriate measure for civil contempt
compensatory damages is actual loss.” Keeley, 1994 WL 59556, at *5. The court added that the
damage award could include attorney’s fees. Id. In Kuykendall, the trial court enjoined the
defendants from operating a business that was allegedly in violation of a covenant not to compete.
The defendants violated the injunction, and the plaintiff filed a motion for contempt. The trial court
determined that the defendants were in contempt of court, and awarded the plaintiff $350 in
attorney’s fees and $1,750 in damages as a result of the violation. The appellate court upheld the
trial court’s damage award, stating that “[t]he court had the authority to award damages in this
contempt proceeding by virtue of T.C.A. § 29-9-105 . . . .” Kuykendall, 1991 WL 10178, at *2. The
Kuykendall court observed that there could be no damage award unless actual damages had been
proven. Id.

        Other cases have also recognized that compensatory damages under section 29-9-105 are
available when the contempt involves the performance of a forbidden act. See Bryan v. Leach, 85
S.W.3d 136, 161, n. 27 (Tenn. Ct. App. 2001) (recognizing that “Tennessee appears to have
incorporated the concept of damages arising from contempt in Tenn. Code Ann. § 29-9-105 . . . .”);
Brummett v. McCoury, No. 03A01-9512, 1996 WL 285405, at *2 (Tenn. Ct. App. 1996) (noting
that damages arising out of contempt is autorized by the statute). In discussing the predecessor to
section 29-9-105,14 the Tennessee Supreme Court explained in Robbins v. Frazier, 52 Tenn. (5
Heisk) 100 (1871), that the damages assessed combine punishment, vindicating the authority of the
court, with compensation in favor of the party injured by the performance of a forbidden act.
Robbins, 52 Tenn. (5 Heisk) at 104; see Headrick v. Carter, 897 S.W.2d 256, 261 (Tenn. 1995)
(citing Robbins with approval). The measure of damages in such a case is the actual damages
sustained by the injured party. Robbins, 52 Tenn. (5 Heisk) at 104.

       The Union argues, and the trial court apparently found, that damages under section 29-9-105
are not available if the contemptuous conduct has ceased. And yet, even if the contemptuous



        14
             The Robbins Court discussed section 4107, which was essentially identical to Tennessee Code Annotated §
29-9-105.

                                                        -10-
conduct has ceased, the doing of the forbidden act has not been “rectified,” i.e. made right,15 until
damages have been paid to make whole the party against whom the forbidden act was committed.
Unlike a sanction imposed solely to vindicate the authority of the court, a monetary award is not
authorized unless actual damages have been sustained, at least to the extent that the party against
whom the contempt was committed was compelled to take legal action, and incur attorney’s fees,
in order to secure compliance with the injunction. Reed, 39 S.W.3d at 120. Under the Union’s
reasoning, a party that caused damages by its contemptuous conduct could extinguish the injured
party’s claim for damages merely by ceasing the contemptuous conduct, which, of course, should
have been done to begin with. This reasoning is simply wrong. Thus, under these circumstances,
we must conclude that the trial court erred in dismissing as moot Overnite’s petition for civil
contempt damages.

        This conclusion does not end our inquiry. The Union argues that, even if Overnite’s petition
for civil contempt is not moot, this Court should dismiss the petition, because Overnite’s failure to
post an adequate bond pursuant to Rule 65.05(1) of the Tennessee Rules of Civil Procedure rendered
the injunctions void. Rule 65.05(1) provides:

         (1) Except in such actions as may be brought on pauper’s oath, no restraining order
       or temporary injunction shall be granted except upon the giving of a bond by the
       applicant, with surety in such sum as the court to whom the application is made
       deems proper, for the payment of such costs and damages as may be incurred or
       suffered by any person who is found to have been wrongfully restrained or enjoined.
       ...

Tenn. R. Civ. P. 65.05(1). Thus, Rule 65.05(1) requires that the bond be made to protect the party
enjoined from “such costs and damages as may be incurred or suffered.” The Union argues that,
because neither the original nor the amended bond inured to its benefit to compensate it for a
wrongful injunction, then the bond was deficient and the injunctions, therefore, were void ab initio.

       In addition, the Union argues that the injunctions issued by the trial court contained
mandatory “self-executing” language, providing that injunctive relief was expressly conditioned on
Overnite posting a proper bond. The October 29, 1999 order provided:

              9. The plaintiff shall post a fifteen thousand dollar ($15,000.00) bond on or
       before 12:00 p.m. November 1, 1999, to maintain the injunction.

               10. Providing the plaintiff posts the bond in the time allocated by the Court,
       the injunction shall remain in effect until further order of the Court.




       15
            “Rectify” means “to set right” or to remedy. W EBSTER ’S N EW C O LLEGIATE D ICTION ARY 959 (1981).

                                                       -11-
        Therefore, the trial court’s order provided that Overnite “shall” post a bond “to maintain the
injunction,” and that the injunction would remain “[p]roviding the plaintiff posts the bond in the time
allocated by the Court.”

        The facts surrounding this issue are undisputed in the record. At approximately 12:11 p.m.
on November 1, 1999, eleven minutes past the deadline, Overnite faxed a copy of the bond it
intended to file to the clerk of the trial court. On November 2, 1999, at 11:02 a.m., one day after the
deadline, a bond was posted by Overnite. Although it was titled “injunction bond,” the bond posted
was only a cost bond; it did not recite that it was security for damages to the Union. The trial court
presumed the bond to have been sufficient, stating in subsequent orders that “[t]he bond which has
been posted by the plaintiff in support of the October 29, 1999 temporary injunction is the security
for the issuance of this restraining order [or temporary injunction].”

        The Union did not object to the bond until February 2000, over three months after the first
injunction was issued. In its response to Overnite’s January 2000 motion for contempt, the Union
argued for the first time that the injunctions were void because of the untimeliness and insufficiency
of the bond posted by Overnite. On March 10, 2000, Overnite filed a replacement bond, without
conceding the merits of the Union’s position. The Union claimed that the replacement bond was
defective as well, because it inured to the benefit of the court clerk, not to the Union for damages
sustained from a wrongfully issued injunction.

       As we have noted, Rule 65.05(1) requires that a bond be posted in order to issue a restraining
order or temporary injunction. Tenn. R. Civ. P. 65.05(1). Rule 65.05(3) provides a remedy for a
party who asserts that a surety is insufficient or the amount of the bond is insufficient:

       A party restrained or enjoined may move the court for additional security; and if it
       appears on such motion the surety is insufficient or the amount of the bond is
       insufficient, the court may vacate the restraining order or temporary injunction unless
       within a reasonable time sufficient security is given.

Tenn. R. Civ. P. 65.05(3). The trial court reasoned that the Rule, providing the enjoined party with
a remedy for challenging the sufficiency of a bond together with authorizing the trial court to vacate
the injunction if sufficient security is not given, implies that an insufficient bond does not void the
issuance of an injunction but rather makes the injunction voidable. The trial court observed that
jurisdictions are split as to whether the failure to post the required injunction bond makes the
injunction issued void ab initio, or voidable until the injunction is vacated. November 21, 2000
Order (quoting 42 Am. Jur. 2d, Injunctions § 291 (2000)). Given the fact that Rule 65.05(3)
provides a remedy for inadequate security, the trial court held that Tennessee would adhere to the
view that an injunction based on inadequate security is voidable, not void. Under that view, the
injunction is voidable “until either an undertaking is provided or the injunction is vacated, and the
enjoined party’s sole remedy is to seek to compel the procuring party to file the undertaking.” Id.




                                                 -12-
        The trial court also relied upon the reasoning in a federal case that decided a similar issue.
In Popular Bank of Florida v. Banco Popular de Puerto Rico, 180 F.R.D. 461 (S.D. Fla. 1998),
the defendants received the trial court’s preliminary injunction order, but soon thereafter engaged
in the prohibited conduct. The defendants asserted that they were not bound by the injunction until
the trial court ruled on the posting of security under Rule 65(c) of the Federal Rules of Civil
Procedure, which is essentially identical to the Tennessee Rule 65.05(1). The trial court disagreed.
The court determined that the failure to include the bond requirement with its preliminary injunction
order did not render the preliminary injunction order invalid or without effect. Popular Bank, 180
F.R.D. at 465. Noting that the defendants had other means of raising the issue of the sufficiency of
the bond, the trial court held that, “if the defendants believe that the preliminary injunction was
procedurally defective for failure to post bond, before violating the preliminary injunction the
defendants should have filed a timely motion to require the plaintiff to post bond.” Id. at 466.

         The trial court below in this case also looked to other Tennessee cases indicating that
Tennessee would follow those jurisdictions holding that an injunction is voidable, not void ab initio,
if it is based on inadequate security. See Nashville Corp., 215 S.W.3d at 820 (holding that the
picketers, who alleged that the injunction violated their constitutional rights, were not free to
speculate on legality of the injunction; rather, the injunction must be obeyed while it continued in
force); Pyott Land & Mining Co. v. Tarwater, 150 S.W. 539, 540 (Tenn. 1912) (holding that
damages cannot exceed amount of bond, and that the defendants can protect themselves by applying
to the trial court to increase the amount of the bond). In addition, Overnite cites Taylor v. Morris,
No. 01A01-9804-CH-00211, 1999 WL 675138 (Tenn. Ct. App. Sept. 1, 1999), in which a party
alleged that he was wrongfully enjoined and sought to recover on the injunction bond. Due to
oversight, however, the trial court had not required the party that obtained the injunction to post an
injunction bond before the subject restraining order was issued. The appellate court noted the lack
of a bond, but allowed the claim to proceed on a malicious prosecution theory. Citing Pyott Land
& Mining, the appellate court stated that “it was incumbent upon [the wrongfully enjoined party]
to bring this oversight to the attention of the trial court in a timely manner.” Taylor, 1999 WL
675138, at *11 n.5.

        We agree with the trial court’s conclusion on this issue, as well as its reasoning. When the
bond posted is found to be insufficient, Rule 65.05(3) provides a remedy, allowing the enjoined party
to “move the court for additional security.” The Rule provides further that if the bond is found to
be insufficient, “the court may vacate the restraining order or temporary injunction unless within a
reasonable time sufficient security is given.” This language indicates that the injunction is vacated
by the court, and that this does not happen automatically in the absence of action by the court. This
is consistent with established law that a party must obey an injunction while it is in force and may
not ignore the order based on the party’s opinion that it is unenforceable. See Nuclear Fuel Servs.,
Inc. v. Local No. 3-677, Oil, Chem. & Atomic Workers Int’l Union, 719 S.W.2d 550, 552 (Tenn.
Ct. Crim. App. 1986) (“These contemnors cannot disregard with impunity an order from a court
which had jurisdiction of the subject matter.”); Stream v. Stream, No. 01-A-019201-CV-00011,
1992 WL 184771, at *2 (Tenn. Ct. App. Aug. 5, 1992) (“However erroneous, the order must be
obeyed until it is set aside.”).


                                                -13-
         The Union also argues that the injunction was invalid ab initio because the order included
“self-executing” language requiring a bond to be posted by noon on November 1, 1999, and
conditioned the effectiveness of the order on the posting of such bond, and because Overnite failed
to strictly comply with these terms.16 On the undisputed facts, the trial court apparently did not
disregard the specific provisions of its October 29, 1999 order; rather, it found that these provisions
were substantially fulfilled. We find no error in the trial court’s conclusion, particularly in light of
the fact that the Union made no objection at the time to the trial court’s acceptance of the late bond.
Therefore, we affirm the trial court’s holding that the injunctions were not void because the bond
posted by Overnite was defective or insufficient.

         Under these circumstances, the dismissal of Overnite’s petition for civil contempt must be
reversed, and the cause remanded for further proceedings. The individual defendants emphasize that
the trial court’s show cause order was directed to the Union, and not to the individual defendants,
and that the individual defendants are not named parties to the contempt proceedings. The trial court
did not address this issue, and may address any issues regarding the individual defendants on
remand.

        We next address Overnite’s assertion on appeal that the trial court erred in dismissing
Overnite’s claim for intentional interference with business relations. In its August 9, 2002 order, the
trial court concluded that Overnite’s claim was legally and factually insufficient. In reaching that
conclusion, the trial court noted that Overnite stipulated that it was not asserting a claim for
interference with prospective economic advantage. Rather, Overnite maintained that the Union had
interfered in the relationship between Overnite and its employees and the security guards hired to
protect employees and others from the strike-related violence and intimidation. The trial court
concluded that, because there was no claim of interference with prospective economic advantage,
Overnite’s claim was in reality a claim of inducement to breach. A necessary element of a claim of
inducement to breach is that damages must arise from a breach of contract. Because the averments
in the complaint did not allege that damages were suffered from the inducement of a breach, the trial
court dismissed Overnite’s claim on the face of the complaint. In the alternative, the trial court
granted summary judgment against Overnite on its claim of interference with business relations,
because Overnite proffered no evidence that contracts between Overnite and its employees and
security guards were breached or terminated because of the alleged wrongful conduct of the Union.
Therefore, Overnite’s claim for intentional interference was dismissed based on the face of the
complaint and on summary judgment as well.

       On appeal, Overnite asserts that the trial court erred in holding that it was required to allege
and prove the existence of a breached contract in order to recover for intentional interference,
because the existence of a contract is not an element of such a claim. Overnite maintains that its
amended complaint contained all of the required elements of a claim for intentional interference with
business relationships.


         16
            Arguably, the language in the trial court’s October 29, 1999 order is not self-executing, in that it does not
provide specifically that the injunction is void if a sufficient bond is not posted by the required date.

                                                         -14-
         In reviewing the sufficiency of Overnite’s complaint under Tennessee Rule of Civil
Procedure 12.02(6), the complaint must be viewed in a light most favorable to Overnite, and all
reasonable inferences must be drawn in its favor. A complaint cannot be dismissed for failure to
state a claim unless there is no set of facts to support the claim. Trau-Med of Am., Inc. v. Allstate
Ins. Co., 71 S.W.3d 691, 696 (Tenn. 2002).

        In January 2000, Overnite amended its original complaint to include a claim for intentional
interference with business relationships. That claim was based on the same facts as Overnite’s
request for injunctive relief. The pertinent allegations in the amended complaint regarding
intentional interference are as follows:

              43. Overnite has valid business relationships with its customers, vendors, and
       its employees.

              44. Prior to October 24, 1999, Defendants had knowledge of Overnite’s
       business relationships with its customers, vendors, and employees.

               45. Defendants’ misconduct was tortious and interfered with the employment
       relationship between Overnite and its employees by adversely impacting the safe
       work environment that Overnite maintains for its employees.

              46. As a direct result of this tortious conduct, Defendants interfered with
       Overnite’s legitimate business relationships with its employees, customers and
       vendors and caused breaches in these relationships. . . .

               47. Defendants’ tortious misconduct proximately caused Overnite significant
       damages including, but not limited to, increased employee payroll expense resulting
       from Defendants’ delaying of Overnite employees in the performance of his or her
       assigned duties, increased service cost by delaying freight to customers, increased
       costs for security guards and related equipment, costs associated with reimbursing
       employees for damage to their personal vehicles, and loss of goodwill with its
       customers.

Though the complaint includes allegations of intentional interference with respect to Overnite’s
relationship with its customers, Overnite represented to the trial court that it intended to pursue its
claims only with respect to Overnite’s relationships with its employees and security guards, and that
it did not seek recovery for loss of prospective economic advantage.17




       17
            Such representations were also made at the appellate oral argument.

                                                       -15-
       In Trau-Med of Am., Inc. v. Allstate Ins. Co., 71 S.W.3d 691 (Tenn. 2002), the Supreme
Court of Tennessee stated that a plaintiff seeking to recover on a claim for intentional interference
with business relationships must show the following:

         (1) an existing business relationship with specific third parties or a prospective
         relationship with an identifiable class of third persons;

         (2) the defendant’s knowledge of that relationship and not a mere awareness of the
         plaintiff’s business dealings with others in general;

         (3) the defendant’s intent to cause the breach or termination of the business
         relationship;

         (4) the defendant’s improper motive or improper means, . . . and finally,

         (5) damages resulting from the tortious interference.

Trau-Med, 71 S.W.3d at 701 (footnotes omitted). Thus, a claim for intentional interference requires
an allegation of damages from tortious interference, not necessarily damages resulting from a breach
of contract.

        Nevertheless, in light of Trau-Med, it is apparent that Overnight’s complaint falls short of
stating a claim for relief in many respects. Under Trau-Med, an intentional interference claim must
allege interference with “an existing business relationship with specific third parties.” There are no
specific third parties named in the complaint, only general categories of persons, such as
“employees.”

        In addition, Overnite’s complaint does not assert that the Union intended to cause a breach
in Overnite’s relationships with its employees and security guards.18 The complaint stated that
“Defendants’ misconduct was intentional and interfered with the employment relationship between
Overnite and its employees by adversely impacting the safe work environment that Overnite
maintains for its employees.” Overnite argues that this is sufficient to show that the Union
intentionally caused a breach of a “business relationship.” In our view, however, the allegation that
the Union’s conduct “was intentional” does not satisfy the requirement of alleging that the Union
intended to cause a breach in the business relationship at issue. Rather, Overnite must allege that
the Union intentionally caused a breach in Overnite’s relationships. This the complaint fails to do.19


         18
             Overnite’s allegation that the strike-related misconduct “interfered” with Overnite’s business relationship
with the security guards does not make sense. The security guards were hired because of the strike-related misconduct;
the guards’ job duties were to protect employees and others from the violent and intimidating behavior. Thus, the
misconduct would not “interfere” with these duties.

         19
            The Union argues that Trau-Med should not be applied retroactively in this case, and that Overnite’s claim
must be dismissed because Tennessee did not recognize a cause of action for intentional interference with business
relationships pre-Trau-Med. Because of our conclusion herein, this argument need not be addressed.

                                                         -16-
        For these reasons, we conclude that the trial court did not err in dismissing Overnite’s claim
for intentional interference with business relationships, pursuant to Rule 12.02(6) of the Tennessee
Rules of Civil Procedure, for failure to state a claim. This holding pretermits other issues raised in
this appeal.

        The decision of the trial court is affirmed in part and reversed in part as set forth above, and
the case is remanded for further proceedings not inconsistent with this Opinion. Costs on appeal are
to be taxed equally to Appellant Overnite Transportation Company, and its surety, and Appellee
Teamsters Local Union No. 480, Affiliated with the International Brotherhood of Teamsters,
Chauffeurs, Warehousemen, and Helpers of America, for which execution may issue, if necessary.




                                                        ___________________________________
                                                        HOLLY M. KIRBY, JUDGE




                                                 -17-
