Brenda Benz-Elliott v. Barrett Enterprises, LP
2015 Tenn. LEXIS 15
| Tenn. | 2015Background
- Brenda Benz-Elliott owned ~91 acres; agreed to sell ~5 acres to Barrett Enterprises (BE) with a contract reserving a 60-foot strip along I‑24 to preserve access to her remaining property; covenants were to survive closing.
- At closing (Mar. 25, 2005) the warranty deed did not include the 60‑foot reservation; parties continued to discuss relocating TDOT right‑of‑way and extending Miller Lane but TDOT never approved the straight‑line extension BE wanted.
- Elliott sued (Sept. 22, 2008) alleging breach of contract, intentional misrepresentation, and negligent misrepresentation; the trial court dismissed the misrepresentation claims, found breach of contract, denied specific performance, and awarded diminution‑in‑value damages (later reduced to $650,000 after post‑judgment access was provided).
- Defendants asserted, among other defenses, the three‑year statute of limitations for injuries to real or personal property (Tenn. Code Ann. § 28‑3‑105(1)); the Court of Appeals held the prevailing claim was an injury to real property and barred by the three‑year limit.
- The Tennessee Supreme Court granted permission to appeal to clarify how courts determine which statute of limitations applies when a complaint alleges multiple claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Which statute of limitations governs Elliott’s prevailing claim? | Elliott: her claim is breach of contract governed by the six‑year contract statute (Tenn. Code Ann. § 28‑3‑109). | Defendants: recovery was for diminution in value of real property, so the three‑year property‑damage statute (§ 28‑3‑105(1)) applies. | The Court held the two‑step gravamen test applies: identify the legal basis of each claim, then the type of injury. Elliott’s prevailing claim is breach of contract; six‑year statute applies. |
| How should courts determine gravamen when multiple/alternative claims are pleaded? | Elliott: gravamen should be identified for each claim, considering basis and injury. | Defendants: Court of Appeals treated gravamen by focusing on damages awarded. | Court: adopt the two‑step Vance approach—first legal basis of the claim, then type of injury/damages sought—applied to each claim individually. |
| Are diminution‑in‑value damages indicative of an injury to real property (triggering the three‑year statute)? | Elliott: diminution here flowed from breach of contract (economic loss), not an injury to the physical property. | Defendants: diminution in market value is an injury to real property, so § 28‑3‑105(1) governs. | Court: diminution here flowed directly from breach of contract; such financial loss does not convert the contract claim into a property‑damage claim for limitations purposes. |
| Should the case be remanded for unresolved issues after reversing on limitation ground? | Elliott: disputed remand necessity; argued record was complete. | Defendants: asked remand to address pretermitted defenses and other issues. | Court: reversed Court of Appeals and remanded to address the other appellate issues. |
Key Cases Cited
- Whaley v. Perkins, 197 S.W.3d 665 (Tenn. 2006) (discussing gravamen for statute of limitations analysis)
- Gunter v. Lab. Corp. of Am., 121 S.W.3d 636 (Tenn. 2003) (statute of limitations governed by gravamen)
- Mike v. Po Group, Inc., 937 S.W.2d 790 (Tenn. 1996) (gravamen tied to damages sought)
- Vance v. Schulder, 547 S.W.2d 927 (Tenn. 1977) (establishing two‑step test: legal basis then type of injury)
- Williams v. Thompson, 443 S.W.2d 447 (Tenn. 1969) (early focus on type of injury over legal theory)
- Alexander v. Third Nat’l Bank, 915 S.W.2d 797 (Tenn. 1995) (applying Vance two‑step analysis; contract basis governed six‑year statute)
- Redwing v. Catholic Bishop for the Diocese of Memphis, 363 S.W.3d 436 (Tenn. 2012) (defining gravamen as the substantial point or real purpose of an action)