Charles GROGAN v. Daniel UGGLA, Et Al.
535 S.W.3d 864
| Tenn. | 2017Background
- Homeowner Daniel Uggla hired franchisee home inspector Jerry Black (Pillar to Post) to perform a pre-purchase visual home inspection; report noted warped deck flooring but did not identify railing defects.
- Sellers replaced deck flooring as a sale condition; contractor did not work on the railing.
- After move-in, plaintiff Charles Grogan (a social guest at a housewarming) leaned on the second-story deck railing, which collapsed; Grogan suffered severe injuries.
- Forensic exam showed railing was improperly constructed with interior finishing nails; Grogan sued multiple parties, including the home inspector and franchise; only the inspector defendants are before the court on appeal from summary judgment for defendants.
- Grogan pleaded negligent misrepresentation (failure to report dangerous railing) and negligent inspection (failure to perform adequate inspection, including pressure testing); defendants moved for summary judgment arguing lack of duty to third parties and that negligent misrepresentation elements were absent.
- Trial court granted summary judgment; Court of Appeals affirmed. Tennessee Supreme Court affirmed, holding defendants negated essential elements of both claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether negligent misrepresentation (Restatement §311) for physical harm applies | Grogan contends inspector failed to report railing defect — a negligent communication causing foreseeable physical harm to third parties | Inspector argues §311 requires an affirmative false statement; omission/non‑disclosure does not satisfy the tort | Court: Even if §311 were adopted, plaintiff made no allegation of an affirmative misstatement; claim fails as pleaded |
| Whether negligent inspection (undertaking) creates duty to homeowner’s guest (third party) under Restatement §324A | Grogan argues inspector undertook inspection that should have identified hazards that would protect foreseeable third‑party guests | Inspector argues the inspection agreement, statutes/regulations, and testimony show a limited, visual inspection for the client only (not a building‑code/safety inspection) and the report disclaims third‑party reliance | Court: Analysis under §324A; no undertaking to protect third parties shown (scope limited by contract/statute/testimony); duty element negated; summary judgment proper |
| Whether the plaintiff’s reliance requirement defeats recovery | Grogan: reliance by homeowner on report would lead to protective action benefitting guests | Defendants: negligent misrepresentation requires injured plaintiff’s reliance; Grogan did not rely on inspector’s report | Court: Reliance element absent for misrepresentation claim; separate negligent‑inspection claim was treated under §324A rather than reliance rule |
| Whether factual disputes preclude summary judgment | Grogan: inspector’s deposition admits safety is an inspection purpose and railings were inspected; factual issues for jury | Defendants: contractual scope and statutes are undisputed and limit undertaking; they affirmatively negated duty | Court: On the record, defendants negated duty and affirmative misstatement elements as a matter of law; summary judgment affirmed |
Key Cases Cited
- U.S. v. Neustadt, 366 U.S. 696 (1961) (discusses negligent misrepresentation in inspection/appraisal context)
- Block v. Neal, 460 U.S. 289 (1983) (explains distinctions between negligent inspection and negligent misrepresentation)
- Giggers v. Memphis Hous. Auth., 277 S.W.3d 359 (Tenn. 2009) (elements of negligence in Tennessee)
- Satterfield v. Breeding Insulation Co., 266 S.W.3d 347 (Tenn. 2008) (duty analysis and factors for imposing duty)
- Biscan v. Brown, 160 S.W.3d 462 (Tenn. 2005) (applying Restatement §324A and voluntary undertaking doctrine)
- Bethlehem Steel Corp. v. Ernst & Whinney, 822 S.W.2d 592 (Tenn. 1991) (Tennessee adopts Restatement §552 principles for negligent misrepresentation involving pecuniary loss)