Chapter 50: Negligent Misrepresentation
1. The Homestead Group, LLC., vs. Bank of Tennessee, No. E2008-00350-COA-R3-CV (Tenn. Ct. App. Feb. 26, 2009).
The Court's Summary:
Plaintiff investor Group purchased a hotel from defendant Bank and after defaulting on the loan the Bank foreclosed and repurchased the hotel at the foreclosure sale. Plaintiff investor Group brought this action against the Bank based on intentional fraud and negligent misrepresentation and sought rescission and/or damages. The Trial Judge, after hearing evidence, ruled in favor of the Bank and dismissed plaintiff’s action. Plaintiff appealed and we affirm the Judgment of the Trial Court.
2. Travis Goodman, et al vs. Kathy Jones, No. 2006-02678-COA-R3-CV (Tenn. Ct. App. Jan. 12, 2009).
The Court's Summary:
Travis Goodman and his wife, Stephanie Goodman (“the Buyers”), sued Kathy Jones (“the Seller”) seeking rescission and damages based upon theories of fraud, misrepresentation, breach of contract and violations of the Tennessee Consumer Protection Act (“the TCPA”). The TCPA claim was dismissed by the trial court and no issue is raised by the Buyers on appeal regarding the propriety of this action. This suit arises out of alleged defects in a septic system on residential property that the Seller sold to the Buyers. Acting on the Seller’s motion, the trial court – at some unidentified time prior to trial – required the Buyers to elect a single remedy from their dually requested relief of rescission and damages. The Buyers chose rescission; accordingly, the case was submitted to the jury as one for rescission only. The court instructed the jury on the Buyers’ theory of intentional misrepresentation (fraud) but failed to charge on the theories of breach of contract and non-fraud (negligent) misrepresentation. The jury found in favor of the Seller and the Buyers’ suit was dismissed in toto. The Buyers appeal. We affirm the trial court’s judgment dismissing the Buyers’ request for rescission based upon an intentional misrepresentation. We vacate the remainder of the judgment. In so doing, we hold that the trial court erred in failing to charge the jury with respect to the Buyers’ theories of breach of contract and negligent misrepresentation.
The Court's Summary:
Plaintiff investor Group purchased a hotel from defendant Bank and after defaulting on the loan the Bank foreclosed and repurchased the hotel at the foreclosure sale. Plaintiff investor Group brought this action against the Bank based on intentional fraud and negligent misrepresentation and sought rescission and/or damages. The Trial Judge, after hearing evidence, ruled in favor of the Bank and dismissed plaintiff’s action. Plaintiff appealed and we affirm the Judgment of the Trial Court.
2. Travis Goodman, et al vs. Kathy Jones, No. 2006-02678-COA-R3-CV (Tenn. Ct. App. Jan. 12, 2009).
The Court's Summary:
Travis Goodman and his wife, Stephanie Goodman (“the Buyers”), sued Kathy Jones (“the Seller”) seeking rescission and damages based upon theories of fraud, misrepresentation, breach of contract and violations of the Tennessee Consumer Protection Act (“the TCPA”). The TCPA claim was dismissed by the trial court and no issue is raised by the Buyers on appeal regarding the propriety of this action. This suit arises out of alleged defects in a septic system on residential property that the Seller sold to the Buyers. Acting on the Seller’s motion, the trial court – at some unidentified time prior to trial – required the Buyers to elect a single remedy from their dually requested relief of rescission and damages. The Buyers chose rescission; accordingly, the case was submitted to the jury as one for rescission only. The court instructed the jury on the Buyers’ theory of intentional misrepresentation (fraud) but failed to charge on the theories of breach of contract and non-fraud (negligent) misrepresentation. The jury found in favor of the Seller and the Buyers’ suit was dismissed in toto. The Buyers appeal. We affirm the trial court’s judgment dismissing the Buyers’ request for rescission based upon an intentional misrepresentation. We vacate the remainder of the judgment. In so doing, we hold that the trial court erred in failing to charge the jury with respect to the Buyers’ theories of breach of contract and negligent misrepresentation.
3. Sprintz-Hall Real Estate Partners, LLC v. Ashleigh Martin, et al, No. M2008-02093-COA-R3-CV (Sept. 29, 2009).
The Court's Summary:
Sprintz-Hall Real Estate Partners, LLC (“Landlord”) sued Ashleigh Martin and R. Martin Enterprises, Inc. (“Tenant”) for breach of a lease. Tenant answered the complaint and counter-sued for, among other things, breach of contract, misrepresentation, and fraud. The case was tried before a jury. At the close of proof, the Trial Court granted a directed verdict for Landlord as to certain of the claims including that Tenant had breached the lease. The Trial Court further found that Landlord did not breach the lease. Tenant’s claims for negligent misrepresentation and intentional misrepresentation were submitted to the jury. The jury returned a verdict finding, inter alia, that Landlord made a misrepresentation that induced Tenant to enter into the lease, that Tenant had ratified the lease, and that Landlord was entitled to a judgment of $44,064 from Tenant. The Trial Court entered judgment on the jury’s verdict in favor of Landlord for $44,064 plus pre-judgment interest, attorney’s fees, and costs. Landlord requested $153,771.54 in attorney’s fees. After a hearing, the Trial Court awarded Landlord $25,000 in attorney’s fees and $3,630.96 as expenses for court reporter fees. Tenant appeals raising issues regarding the directed verdict, jury instructions, and the Trial Court’s response to a question asked by the jury. Landlord raises an issue regarding the award of attorney’s fees. We affirm.
The Court's Summary:
Sprintz-Hall Real Estate Partners, LLC (“Landlord”) sued Ashleigh Martin and R. Martin Enterprises, Inc. (“Tenant”) for breach of a lease. Tenant answered the complaint and counter-sued for, among other things, breach of contract, misrepresentation, and fraud. The case was tried before a jury. At the close of proof, the Trial Court granted a directed verdict for Landlord as to certain of the claims including that Tenant had breached the lease. The Trial Court further found that Landlord did not breach the lease. Tenant’s claims for negligent misrepresentation and intentional misrepresentation were submitted to the jury. The jury returned a verdict finding, inter alia, that Landlord made a misrepresentation that induced Tenant to enter into the lease, that Tenant had ratified the lease, and that Landlord was entitled to a judgment of $44,064 from Tenant. The Trial Court entered judgment on the jury’s verdict in favor of Landlord for $44,064 plus pre-judgment interest, attorney’s fees, and costs. Landlord requested $153,771.54 in attorney’s fees. After a hearing, the Trial Court awarded Landlord $25,000 in attorney’s fees and $3,630.96 as expenses for court reporter fees. Tenant appeals raising issues regarding the directed verdict, jury instructions, and the Trial Court’s response to a question asked by the jury. Landlord raises an issue regarding the award of attorney’s fees. We affirm.
4. Dale and Lauren Stafford v. Robert Emberton, No. M2008-02250-COA-R3-CV (Sept. 15, 2009).
The Court's Summary:
The trial court granted seller’s motion for summary judgment on misrepresentation claims arising from the sale of real property based on an “as is” provision agreed upon by the parties. We affirm the summary judgment and find that the seller negated an essential element of the buyers’ claims in his affidavit denying knowledge of the alleged defects. Buyer failed to meet his burden to create an issue of fact in any way about seller’s knowledge. Alternatively, summary judgment is also sustained as to all the misrepresentation claims based on the “as is” provision, except the fraudulent misrepresentation claim which we find was not properly alleged in the complaint.
5. Timothy Bowen, et al vs. Samuel E. Rasnake, No. E2009-00353-COA-R3-CV (Tenn. Ct. App. Dec. 28, 2009).
The Court's Summary:
Timothy Bowen and his wife Leanne Bowen (“the Buyers”) contracted to purchase a house from Samuel E. Rasnake (“the Seller”) that was still under construction. The Buyers experienced numerous problems with the house and filed their complaint against the Seller for defective construction, breach of warranty and misrepresentation. After a bench trial, the court awarded the Buyers judgment against the Seller in the amount of $42,300. The Seller appeals. We affirm.
The Court's Summary:
The trial court granted seller’s motion for summary judgment on misrepresentation claims arising from the sale of real property based on an “as is” provision agreed upon by the parties. We affirm the summary judgment and find that the seller negated an essential element of the buyers’ claims in his affidavit denying knowledge of the alleged defects. Buyer failed to meet his burden to create an issue of fact in any way about seller’s knowledge. Alternatively, summary judgment is also sustained as to all the misrepresentation claims based on the “as is” provision, except the fraudulent misrepresentation claim which we find was not properly alleged in the complaint.
5. Timothy Bowen, et al vs. Samuel E. Rasnake, No. E2009-00353-COA-R3-CV (Tenn. Ct. App. Dec. 28, 2009).
The Court's Summary:
Timothy Bowen and his wife Leanne Bowen (“the Buyers”) contracted to purchase a house from Samuel E. Rasnake (“the Seller”) that was still under construction. The Buyers experienced numerous problems with the house and filed their complaint against the Seller for defective construction, breach of warranty and misrepresentation. After a bench trial, the court awarded the Buyers judgment against the Seller in the amount of $42,300. The Seller appeals. We affirm.