IN THE SUPREME COURT OF TENNESSEE
AT NASHVILLE
FOR PUBLICATION
WILLIAM ROBINSON, a/k/a ) Filed: September 15, 1997
BILLY C. ROBINSON, )
) DAVIDSON CIRCUIT
Plaintiff/Appellee, )
) Hon. Barbara N. Haynes
Vs. ) Judge
)
JAMES R. OMER, SR., )
)
Defendant/Appellant. ) No. 01S01-9611-CV-00228
FILED
September 15, 1997
Cecil W. Crowson
Appellate Court Clerk
FOR PLAINTIFF/APPELLEE: FOR DEFENDANT/APPELLANT:
Robert L. Callis Winston S. Evans
Callis & Hershey Evans, Jones, & Reynolds
Mt. Juliet, Tennessee Nashville, Tennessee
OPINION
COURT OF APPEALS REVERSED IN PART
JUDGMENT OF TRIAL COURT REINSTATED. DROWOTA, J.
The plaintiff, William Robinson, brought this action against the defendant,
attorney James R. Omer, Sr., alleging negligent misrepresentation.1 Robinson asserts
that he agreed to secretly videotape the sexual encounters of his friend, and Omer’s
client, Dewey Lineberry, in reliance upon Omer’s erroneous advice that the videotaping
was legally permissible. Robinson initiated this action seeking to recover
compensatory and punitive damages after he settled the civil lawsuits which were filed
against him by some of the women who were secretly taped.
The trial court granted Omer’s motion for summary judgment, but the Court of
Appeals reversed, finding disputed issues of material fact. Thereafter, we granted
Omer’s application for permission to appeal. We emphasize that Omer denies giving
such advice to Lineberry. However, taking the allegations as true and viewing the
evidence in the light most favorable to Robinson, the nonmoving party, as we must for
purposes of summary judgment, we conclude that the allegedly negligent and false
legal advice was supplied for the guidance of others in personal matters rather than
business transactions. Therefore, the defendant met his burden of negating an
essential element of the plaintiff’s claim for negligent misrepresentation by establishing
that the alleged false information was not supplied for the guidance of others in their
business transactions. Restatement (Second) of Torts, Section 552 (1977). The
burden then shifted to the plaintiff, the non-moving party, to show that the information
was supplied for a business purpose. The plaintiff failed to meet that burden.
Accordingly, the trial court properly granted summary judgment. The judgment of the
Court of Appeals with respect to the claim of negligent misrepresentation is reversed,
and the trial court’s grant of summary judgment to the defendant is reinstated.
1
Robinson also alleged, in this action, outrageous conduct and invasion of privacy. The trial
cou rt gra nted Om er’s m otion for su mm ary jud gm ent o n the se c laim s and the C ourt o f App eals
affirmed. Robinson did not seek to appeal from the Court of Appeals’ judgment as to those claims.
-2-
BACKGROUND
Because summary judgment was awarded to the defendant, the following
statement of facts is based upon the most favorable view of the record towards the
plaintiff, the nonmoving party.2
William Robinson, the plaintiff, and Dewey Lineberry, have been friends and
business associates for many years. In 1986, Robinson, a contractor by trade, agreed
to construct a three story office building for Lineberry, a local businessman, in Mt. Juliet,
Tennessee. On the third floor of the building Robinson constructed, at Lineberry’s
direction, a “camera room” equipped with two way mirrors through which a person could
look into a weight room and bathroom located next to Lineberry’s office. Lineberry told
Robinson that he intended to use the camera room to secretly videotape his sexual
encounters because he was concerned that he might be falsely accused of rape in the
future. Lineberry believed that having videotapes of his sexual encounters would
protect him from such allegations. Robinson was aware of Lineberry’s concern and
actively participated in the construction of the camera room.
The defendant, James R. Omer, Sr., is a licensed Tennessee attorney who
represented Lineberry in a variety of personal and business matters between the mid-
1970's and 1990. According to Robinson’s amended complaint, Omer advised
Lineberry, prior to the construction of the office building, that building a camera room
and secretly videotaping sexual encounters without the consent of the women involved
was completely legal and comparable to keeping a diary. According to the allegations,
Omer suggested that Lineberry persuade his good friend Robinson to act as
cameraman. When Lineberry relayed Omer’s suggestion, Robinson was reluctant to
2
Byrd v . Hall , 847 S.W .2d 208, 215 (Tenn. 1993 ).
-3-
assume the role of cameraman. However, Lineberry called Omer from his office for the
purpose of assuring Robinson of the legality of the secret taping. According to the
allegations of record, Omer, who had been told Robinson was present, assured
Lineberry that the activity was legally permissible, and again compared it to keeping a
diary.
Robinson did not have an attorney-client relationship with Omer, and he never
personally received legal advice from Omer about the legality of the secret videotaping.
However, Robinson, from the concealed camera room, secretly videotaped numerous
instances of Lineberry having sexual intercourse with women in the weight room and
bathroom which were located on the third floor of the office building. Robinson
videotaped Lineberry’s sexual encounters from 1986 to 1993.
The videotaping remained secret until Omer informed District Attorney General,
Tom P. Thompson, Jr., on January 6, 1994, that Lineberry had a secret camera room in
his office which he had used to film a lingerie party. Even though he had known about
the camera room, by his own admission, for about one year, Omer provided the district
attorney with this information only after receiving a complaint which Lineberry had filed
against him with the Board of Professional Responsibility.3
Based upon the information provided by Omer, Wilson County law enforcement
officers obtained a warrant to search Lineberry’s office. The search uncovered
videotapes of Lineberry having sex with various women. Robinson admitted to police
3
Acc ordin g to th e alleg ation s, so me time prior t o 199 2, Om er pro mis ed Lin ebe rry a fe e in
exchange for personal injury referrals. Lineberry made such a referral that resulted in a substantial
settlement, but Omer refused to pay the promised fee. Lineberry apparently felt mistreated and
filed a complaint against Omer with the Board of Professional Responsibility. Omer received the
complaint on December 20, 1993 and called the district attorney general on January 6, 1994.
-4-
that he had operated the video camera. Although no criminal charges were filed
against Lineberry or Robinson, law enforcement officials contacted several of the
women who were taped, and four of them filed civil lawsuits against both Lineberry and
Robinson, alleging, among other things, invasion of privacy and outrageous conduct.
Robinson settled the claims filed against him and then instituted this lawsuit
against Omer asserting negligent misrepresentation. Robinson alleged that he relied
upon Omer’s advice, given to Lineberry that, secretly videotaping Lineberry’s sexual
encounters, without the consent of the women involved, was legally permissible.
Robinson claimed that Omer knew or should have known that he would rely upon that
advice. Robinson also asserted claims of outrageous conduct and invasion of privacy.
Omer moved to dismiss the action, and the trial judge held a hearing on the
motion. Because matters outside the pleadings were presented and considered, the
trial judge treated it as a motion for summary judgment which she granted, in favor of
Omer, on all three claims. Robinson appealed, and the Court of Appeals affirmed the
trial court’s decision with respect to the claims of invasion of privacy and outrageous
conduct, but reversed the grant of summary judgment on the negligent
misrepresentation claim. Thereafter, we granted Omer permission to appeal and now
reverse the judgment of the Court of Appeals with respect to the claim of negligent
misrepresentation, and reinstate the judgment of the trial court.
SUMMARY JUDGMENT
The standards governing an appellate court’s review of a summary judgment
motion are well settled. Our inquiry involves purely a question of law; therefore, we
review the record without a presumption of correctness to determine whether the
-5-
absence of genuine issues of material facts entitle the defendant to judgment as a
matter of law. McCarley v. West Quality Food Service, ___ S.W.2d ___ (Tenn. 1997);
Bain v. Wells, 936 S.W.2d 618, 622 (Tenn. 1997); McClung v. Delta Square Ltd.
Partnership, 937 S.W.2d 891, 894 (Tenn. 1996); Byrd v. Hall, 847 S.W.2d 208, 210
(Tenn. 1993); Tenn. R. Civ. P. 56.03.
Likewise, the standards governing the assessment of evidence in the summary
judgment context are also well established. Mere conclusory assertions that the non-
moving party has no evidence are clearly insufficient. Byrd, 847 S.W.2d at 215. The
movant must either affirmatively negate an essential element of the non-movant’s claim
or conclusively establish an affirmative defense. McCarley, __S.W.2d at ___; Byrd, 847
S.W.2d at 215, n. 5. If the movant fails to negate a claimed basis for the suit, the non-
movant’s burden to produce evidence establishing the existence of a genuine issue for
trial is not triggered and the motion for summary judgment must fail. Id. If the movant
successfully negates a claimed basis for the action, the non-movant may not simply rest
upon the pleadings, but must offer proof to establish the existence of the essential
elements of the claim.4 Id. Courts must view the evidence and draw all reasonable
inferences in the light most favorable to the nonmoving party. Bain, 936 S.W.2d at 622;
Byrd, 847 S.W.2d at 210-11. If both the facts and conclusions to be drawn from the
facts permit a reasonable person to reach only one conclusion, summary judgment
should be granted. McClung, 937 S.W.2d at 894; Carvell v. Bottoms, 900 S.W.2d 23,
26 (Tenn. 1995).
4
As we pointed out in Byrd, and reaffirmed in McCarley, a no nm oving party m ay sat isfy his
or her burden by (1) pointing to evidence overlooked or ignored by the moving party that establishes
a material factual dispute, (2) by rehabilitating the evidence attacked in the moving party’s papers,
(3) by producing additional evidence showing the existence of a genuine issue for trial, or (4)
submitting an affidavit explaining why further discovery is necessary as provided for in Tenn. R.Civ.
P. 56.06 . McCarley, ___ S.W .2d at ___ ; Byrd, 847 S.W .2d at 215 , n. 6.
-6-
Although the standards are strict, in this case summary judgment is appropriate.
Omer met his burden of negating an essential element of the claim of negligent
misrepresentation. The burden then shifted to Robinson to show that the information
was supplied for guidance in business transactions. Robinson failed to satisfy that
burden. The evidence in this record, viewed in the light most favorable to Robinson, the
nonmoving party, fails to establish the existence of an essential element of the claim --
information supplied for the guidance of others in their business transactions.
NEGLIGENT MISREPRESENTATION
This Court has recognized three distinct actions in tort based upon
misrepresentation: fraud or deceit; strict liability under Section 402B of the Restatement
(Second) of Torts (1965); and negligent misrepresentation under Section 552 of the
Restatement (Second) of Torts (1977). Ritter v. Custom Chemicides, Inc., 912 S.W.2d
128, 130 (Tenn. 1995); see also John Martin Co. v. Morse/Diesel, Inc., 819 S.W.2d 428
(Tenn. 1991); Jasper Aviation, Inc. v. McCollum Aviation, Inc., 497 S.W.2d 240, 242-43
(Tenn. 1972).
This case concerns the third cause of action, negligent misrepresentation.
Tennessee has adopted Section 552 of the Restatement (Second) of Torts “as the
guiding principle in negligent misrepresentation actions against other professionals and
business persons.” Bethlehem Steel Corp. v. Ernst & Whinney, 822 S.W.2d 592, 595
(Tenn. 1991). Section 552 provides, in pertinent part, as follows:
(1) One who, in the course of his business, profession or
employment, or in any other transaction in which he has a
pecuniary interest, supplies false information for the
guidance of others in their business transactions, is subject
to liability for pecuniary loss caused to them by their
justifiable reliance upon the information, if he fails to
-7-
exercise reasonable care or competence in obtaining or
communicating the information.
(2) Except as stated in Subsection (3), the liability stated in
Subsection (1) is limited to loss suffered
(a) by the person or one of a limited group of persons for
whose benefit and guidance he intends to supply the
information or knows that the recipient intends to supply it;
and
(b) through reliance upon it in a transaction that he intends
the information to influence or knows that the recipient so
intends or in a substantially similar transaction.
Restatement (Second) of Torts, §552 (1977) (emphasis added).
In discussing the requirements for recovery under Section 552, this Court has
stated that liability in tort will result, despite the lack of contractual privity between the
plaintiff and defendant, when,
(1) the defendant is acting in the course of his business, profession, or
employment, or in a transaction in which he has a pecuniary (as opposed
to gratuitous) interest; and
(2) the defendant supplies faulty information meant to guide others in
their business transactions; and
(3) the defendant fails to exercise reasonable care in obtaining or
communicating the information; and
(4) the plaintiff justifiably relies upon the information.
John Martin Co., 819 S.W.2d at 431 (emphasis added); accord Ritter, 912 S.W.2d at
130.
Applying this formulation of the rule, this Court has allowed non-clients to recover
from attorneys under Section 552. See e.g. Collins v. Binkley, 750 S.W.2d 737 (Tenn.
1988); Stinson v. Brand, 738 S.W.2d 186 (Tenn. 1987). In these cases, the lawyers
had negligently provided erroneous information in the course of real estate transactions
-8-
which was relied upon by nonclient participants to the transactions. This Court held
recovery was appropriate, even though the plaintiffs were not clients, because the
advice was given for the guidance of the plaintiffs in the course of the real estate
transaction and reliance upon that advice was justifiable and foreseeable.
Likewise, in the non-lawyer cases involving application of Section 552, recovery
has been allowed only when the advice or information negligently supplied was given in
the course of a commercial or business transaction for guidance of others in their
business transactions. See e.g. Bethlehem Steel Corp., 822 S.W.2d at 592 (national
accounting firm which negligently prepared an audit report regarding customer of
manufacturer held liable to manufacturer which relied upon the audit report to its
detriment in extending credit to customer); John Martin Co., 819 S.W.2d at 429
(construction manager who negligently supplied information regarding the construction
project held liable to subcontractor who relied upon the information in performing work
at the site); Tartera v. Palumbo, 453 S.W.2d 780 (Tenn. 1970) (land surveyor who
negligently prepared a plat for the purchaser of property held liable to sellers because
he had full knowledge that the survey was to be used for describing the property in the
warranty deed upon which both the sellers and buyers would rely); Shelby v. Delta Air
Lines, Inc., 842 F.Supp. 999, 1015 (M.D. Tenn. 1993)(“The Tennessee cases involving
negligent misrepresentation all involve commercial transactions.”).
In contrast, the advice allegedly given by Omer, upon which Robinson claims to
have relied, was not provided for the guidance of Lineberry and Robinson in a business
transaction. Indeed, the conduct of Lineberry and Robinson, in no way, was related to
a commercial or business transaction. Robinson videotaped Lineberry’s sexual
encounters as a favor and accommodation to Lineberry, as is evident from Robinson’s
-9-
deposition testimony. Robinson agreed that he considered Lineberry to be “a really
good friend,” and said that he received no payment for operating the video camera for
Lineberry. When asked whether his “willingness to videotape” was attributable to a
desire to protect a financial interest he had with Lineberry due to their business
relationship, Robinson responded as follows:
A. I don’t think so. . . .
Q. I’m just asking your motivation. I mean, you’ve told us that
you did it because [Lineberry] asked you to, and because he
wanted to be protected from a false claim of rape. And all
I’m trying to follow up on is whether or not part of your
motivation was that, in light of your business relationship
with him, you felt a financial necessity to protect yourself and
him?
A. I don’t think that would have been a primary concern of
mine, no sir.
Q. Would it have been any concern of yours?
A. I can’t say as it crossed my mind, no, sir.
Therefore, even assuming, as we must, that defendant Omer advised Lineberry that
secretly videotaping his sexual encounters, without the consent of the women involved,
was legally permissible, Robinson’s negligent misrepresentation claim must fail
because that advice was not given for the guidance of Lineberry or Robinson in their
business transactions. See Shelby, 842 F.Supp. at 1015 (“[T]he language of Section
552 expressly refers to the negligent supplying of false information ‘for the guidance of
others in their business transactions.’”) (emphasis in original) (applying Tennessee law);
see also Pickering v. Pickering, 434 N.W.2d 758, 762 (S.D. 1989) (husband’s claim of
negligent misrepresentation against wife for misleading him about the paternity of a
child born during their marriage failed because it did not arise from a commercial or
business transaction).
-10-
Robinson videotaped Lineberry’s sexual activities solely as a favor to his good
friend. Lineberry never paid Robinson for his efforts, and Robinson testified that when
he decided to act as cameraman, business interests did not “cross[] his mind.”
Therefore, the evidence in this record, viewed in the light most favorable to Robinson,
fails to establish an essential element of the claim for negligent misrepresentation --
that the allegedly negligent advice given by Omer was meant to guide others in their
business transactions.
CONCLUSION
Because we conclude that the allegedly negligent legal advice supplied by Omer
was for the guidance of others in personal matters rather than business transactions,
the defendant met his burden of negating an essential element of the plaintiff’s claim of
negligent misrepresentation under Section 552, Restatement (Second) of Torts (1977).
Consequently, the judgment of the Court of Appeals is reversed with respect to the
claim of negligent misrepresentation, and the trial court’s grant of summary judgment to
the defendant is reinstated.
FRANK F. DROWOTA, III,
JUSTICE
CONCUR
Anderson, C.J.
Reid, Birch, Holder, JJ.
-11-