*1 Joseph et al. DAVIS
Patrick J. MCGUIGAN et al. Tennessee,
Supreme Court at Nashville. Oct. 2009 Session. Oct.
OPINION HOLDER, J., M.
JANICE delivered the Court, opinion GARY which R. LEE, JJ., joined. WADE SHARON G. *3 KOCH, JR., J., WILLIAM C. filed a separate dissenting opinion, which CLARK, C.J., joined. CORNELIA A. appeal This arises from trial court’s grant judgment an action against a real appraiser estate for fraudu- lent and for violation of the Tennessee Consumer Protection Act. A husband alleged and wife ap- praiser, by who was hired the bank financ- ing the husband and wife’s home construc- tion, recklessly overestimated the value of proposed their construction and that reasonably relied on the value to their Appeals detriment. The Court of affirmed the ruling, trial court’s holding an appraisal opinion an cannot form the basis misrepre- for fraudulent sentation claim. that an opinion We hold can form the misrep- basis of a fraudulent resentation claim. further We hold that genuine preclude issues of material fact summary judgment as to the husband and against appraiser. wife’s claims We Appeals reverse the Court of and remand case to for pro- the trial court further ceedings opinion. consistent with this I. History Facts and Procedural (“the Joseph and Kimberli Davis Davises”) purchased unimproved, cor- ner lot in the Bend Horseshoe subdivision Nashville, Tennessee, $135,500. near They subsequently retained an architect to design a custom home for the lot and Berexa, Harrison, Daniel P. Bennett C. selected Frawood Builders as the Custom Holmes, Nashville, Jr. and Brian W. Ten- working extensively contractor. After nessee, for the appellants, Joseph Davis with the Davises to refine the home’s de- and Kimberli Davis. amenities, furniture, sign and to select and Nashville, Hoskins, home, Michael G. Tennes- fixtures for the the contractor calcu- see, building for the J. that the appellees, Patrick lated cost of home $595,394.50, specifications & the Davises’ Associates. $730,894.50
resulting per square in a total cost of estimated cost foot the total home, product feet of the added the square the lot and construction. value, to the estimated site and added an construction, To finance the the Davises “ Improvements.” of Site ‘As-is’Value Us- Gnyp, contacted Alene a loan consultant at approach, the cost (“SunTrust”) and submit- SunTrust Bank $731,000 if praised property’s value as Applica- ted a Uniform Residential Loan completed according the home were tion to for a residential SunTrust plans specifications. contractor’s states, in application part, loan. The loan acknowledge specifically Using comparison approach, “The the sales [Davises] (9) Lender, that: ... its agree estimated the amount that *4 agents, assigns buyer pay successors and make no a reasonable would for the warranties, express or or representation by evaluating compa- home recent sales of Borrower(s) implied, regarding to the the properties adjusting compa- rable and the property, the condition of the property, properties’ rable sales based on the prices property.” part the value of the As of the subject specifications. home’s Mr. McGui- application, signed loan the Davises also gan any the did not use homes from document entitled “Disclosure Notices- for compari- Horseshoe Bend subdivision Right A Copy Appraisal,” to Receive son and instead chose the recent sales of states, which the to a right copy “You have three in the LaurelBrooke sub- properties appraisal report of the used in connection division, approximately located one mile your application for credit.” Sun- from the Horseshoe Bend subdivision. began processing Trust the Davises’ loan According appraisal report, to the 15, application May on 2002. These sales to their were chosen due similarity subject [property] 18, 2002, employee On June an of Sun- size, quality, and are appeal and deemed Appraisal Request Trust faxed an to Pat- the best the most similar sales McGuigan, rick an whom appraiser Sun- and/or report. available as of the date of this regularly Trust used. The employee had adjustments All sales were given site written top request, “Rush!” at the due to the known difference in site val- request and the stated that the “sales Design/Appeal adjustments ues. were price” for the proposed house was given subject to all sales because the $735,000. Mr. McGuigan provided was [property] story is one more and cost[s] plans specifications contractor’s and for Equal weight given to build. to all the Davises’ custom home. Mr. McGuigan sales in estimating the market value for accepted the assignment and executed a subject property. Uniform Appraisal Report Residential day. next Using comparison approach, the sales McGuigan appraised property the Davises’ According the appraisal report, $735,000 value as if the home were com- approaches used two pleted according plans specifica- to its praise property: approach” the “cost tions. comparison approach.” “sales approach, Pursuant to the cost Mr. McGui- appraisal report estimates the mar- gan $735,000. consulted the “Marshall & Swift Resi- ket value of the home It as Handbook, dential Cost local builder esti- reconciles differences value result- mates, and own cost approach [his] files” to estimate from the cost and the sales per square reproduce comparison cost foot to approach by stating that “[b]e- home. then multiplied buyers rely heavily comparisons, cause on comparison approach the direct sales is The Davises subsequently decided to sell considered best indicator of market their home. They consulted six real estate approach value” but that cost sup- “[t]he agents, each of whom told them that the ports comparison the sales approach.” home would $590,000 sell for between $625,000. The Davises hired real estate forwarded a copy of his agent Hays Michael to sell the property. appraisal report to SunTrust on June advice, On Hays’s the Davises listed including Uniform Standards of the property for sale at on No- Appraisal Professional Practice Compli- vember 2004. The accepted Davises ance Addendum report. with the Under offer on the home from the first prospec- the heading “Purpose of the Appraisal,” and, tive buyer 8, 2005, April closed on Mr. McGuigan included the following the sale $660,000. of the property for On appraisal report statement: “This pre- April 2005, Mr. Davis complaint filed a pared for the sole and exclusive use of the divorce, stating that he and Ms. Davis lender as mentioned in the client section of had separated on November report, this to assist with the mortgage lending decision. It is not to be relied On April Mr. and Ms. Davis upon by parties third purpose, a complaint against filed Mr. McGuigan in *5 whatsoever.” SunTrust only was the enti- the Circuit Court of County. Davidson ty identified in the section Lender/Client The Davises asserted that Mr. McGuigan of the appraisal report. had intentionally or negligently misrepre- Gnyp
Ms. informed the sented the market by Davises tele- value of their home phone when proposed appraised that their he it in home had been June 2002 and $735,000 appraised for he had also and that their loan violated the Tennessee application for Consumer ap- had been Protection Act. After discov- proved. ery, At some time the trial court grant- between June 21 entered an order and June signed McGuigan summary the Davises judgment a cost-plus with regard contract with Frawood Custom Davises’ intentional misrepresentation Builders to construct their home. Tennessee Consum- er Davises had not Protection Act copy obtained a of the claims. The Davises appraisal report they subsequently before filed a signed the notice of voluntary contract Builders, with Frawood dismissal of their negligent Custom misrepresenta- nor they did tion claim. appraisal read the report
when copy received a of it at the loan The Davises appealed the summary closing July judgment as to the misrepre- intentional living After in the completed home for sentation and Tennessee Consumer Pro- year, more than a Mr. Davis returned to tection Act claims to the Appeals. Court of seeking SunTrust equity home line of The appellate intermediate court affirmed credit. SunTrust ordered another summary judgment, holding part praisal of the part Davises’ home as because “appraisals are not considered approval process, facts, loan and the second ap- but rather opinions,” estimates or an praisal stated that the home’s value was provide cannot the basis for an $510,000. The bank denied the Davises’ intentional misrepresentation claim. application. loan into the Davis v. McGuigan, No. M2007-02242- inquiring After denial, Mr. COA-R3-CV, Davis learned of the second 2008 WL at *6 appraisal. time, 2008). Around the same Ms. (Tenn.Ct.App. Sept. grant- We Davis became unemployed. ed the permission Davises to appeal. Analysis matively negates
II. an essential element of claim or shows that the Davises’ Summary judgment may grant an element prove Davises cannot essential there is only ed if the record shows “that v. of their claim at trial. Mills CSX genuine no issue as to material fact (Tenn. Inc., Transp., moving party and that the is entitled to a 2009) Co., Publ’g Hannan v. (citing Alltel a matter of law.” Tenn. R. judgment as (Tenn.2008)). 1, 8-9 To affir granting P. 56.04. Because the Civ. matively negate an essential element of the ques denying judgment misrepresentation, claim of intentional law, apply tion of we a de novo standard of point must to evidence that Mall, review. Blair v. Town W. disprove allega tends to a material factual (Tenn.2004). 761, 763 We first ad S.W.3d (citing tion made the Davises. Id. properly dress whether the trial court Co., Ry. Martin S. Norfolk McGuigan summary judgment granted Mr. (Tenn.2008)). has misrepresenta on the Davises’ intentional first, challenge identified evidence to turning tion claim before whether sum fourth, fifth, and sixth elements.1 mary judgment properly granted on was Protec Davises’ Tennessee Consumer i. tion Act claim. element, Regarding the first
A. Misrepresentation Intentional Claim McGuigan contends that his prove The Davises must six ele fact, opinion, representation not a ments to establish their claim of intention opinion provide and that an cannot a basis (1) al at trial: for the Davises to show at trial that Mr. *6 McGuigan representation made a of an McGuigan made a of representation exist (2) fact; past existing represen or that the past fact. support, For McGui- (3) made; tation was false when it was that gan points appraisal report, to his which fact; representation involved a material provides states that it an estimate of the (4) represen made the Additionally, market value. we observe recklessly, tation with knowledge that it by that a real estate is defined false, or repre without belief that the Tennessee Code Annotated section 62-39- (5) true; sentation was that the Davises 102(3) (2009) process as “the act or of reasonably relied on the representation; an developing opinion value of identi of (6) damaged by and that were relying added). real (Emphasis fied estate.” The representation. on the Walker v. Sunrise dispute Davises do not that an is Truck, Inc., 249 Pontiac-GMC S.W.3d opinion argue an of value but that it is a (Tenn.2008) (citations omitted). 311 representation for the of purpose an inten misrepresentation tional claim. satisfy production
To his burden of summary Lowenstein, judgment on the Davises’ In Sunderhaus v. Perel & claim, intentional misrepresentation general this Court stated that the rule is “ordinarily must either produce representations evidence or that of value refer to evidence in the that affir- seeking dispose proper- record made one of brief, fourth, fifth, 1. In his and We contends sixth elements. there- genuine McGuigan’s arguments there is no issue fact of material as fore consider Mr. re- garding of the six elements. Before the trial the second and third elements to be court, however, Vincent, argued Fayne he waived. See first, (Tenn.2009). judgment only was warranted on the ty commercially regarded (Second) are to be as it.” Restatement of Torts expressions opinion constituting (1977). of ... not § 538A cmt. c speaker’s rela- a basis of fraud.” 215 Tenn. 388 tionship to the recipient important. also is (1965). observed, We person A may doubt a seller’s statement however, “a number exceptions of to this about the value property of the being sold general rule.” Id. “Representations as to while the same person may accept as true price market or market value are not mere expert’s disinterested opinion of value opinion, statements of but are representa- about property. same See Restate- which, false, tions of fact if will support an (Second) ment § of Torts 539 cmt. c action for fraud or deceit.” Id. (quoting (1977).2 Indeed, section 543 of the Re- 62). § Am.Jur. Fraud and Deceit alsoWe (Second) states, statement of Torts “The stated, recipient of a fraudulent matter, party Wherever a states a which opinion justified in relying upon it if might otherwise be only opinion, and opinion is that of a person whom the does not state it as the mere expression recipient reasonably believes to be disin- his opinion, own but affirms it as an terested and if the fact that such person transaction, existing material to the fact the opinion holds is material.” so party may that the other reasonably We therefore hold that an opinion of fact, treat it rely as a upon act may provide value the basis for a fraudu- such, it as then the clearly statement lent misrepresentation claim and overrule becomes an affirmation of fact within the the holding of the Appeals Court of rule, meaning general may Mr. McGuigan’s appraisal is not actionable a fraudulent misrepresentation. because it opinion is an of value. Because (quoting Id. at 142-43 Pomeroy’s Equity not has shown that (5th ed.1941)). Jurisprudence 878b Davises are prove unable to the first ele- “The statements which most frequently ment of their intentional misrepresentation come within this branch of the rule are trial, claim at he has not satisfied bur- concerning those (quot- value.” Id. at 143 den production for summary judgment ing 3 Pomeroy’s Equity Jurisprudence on the first element. We therefore turn to (5th ed.1941)). § 878b *7 McGuigan’s arguments Mr. concerning the (Second) The Restatement of Torts also other elements of the Davises’ intentional opinion may states that an give rise to an misrepresentation claim. intentional claim. Re- (Second) (1977). statement of Torts 525 ii. It further explains that the form of an element, Regarding the fourth Mr. opinion may control whether it is a repre- “ McGuigan contends that there is genu sentation. T no believe that there are ten here,’ ine acres issue of material fact as is a different ... to whether he statement from ‘The area of made the representation recklessly, this land is ten acres.’ conveys false, The one an expression knowledge of some it was or without doubt while the other leaves no room for belief that representation true. was In representation person "[A] that a who is incorrect. ap- This is true since there is no reasonably by recipient believed to be parent person reason for a disinterested to particular opinionf] may disinterested has a exaggerate upon may the facts which it reasonably impliedly be understood as assert- opinion assumed that his is based and of opinion expressed that the is an honest recipient nothing.” which the knows one and that he knows of no facts that make it
156 evidence that determining puni- provided context of whether Mr. has warranted, Davises’ factual alle- disprove have tends to damages tive are we held gation intentionally that he chose homes recklessly “the person that a acts when inflate the of, upscale neighborhood a more consciously person is aware but disre- Mills, home’s value. See proposed gards, unjustifiable a substantial and risk Also, S.W.3d at 631. disregard a nature that its consti- of such ap- that the value stated in the statement gross tutes a deviation from the standard by the cost praisal report supported was ordinary person of care that an would disprove is evidence that tends to approach exercise under all the circumstances.” allegation the Davises’ factual DaimlerChrysler Corp., Flax appraised not believe his McGuigan did (Tenn.2008) (quoting S.W.3d Finally, by pointing value was accurate. Co., Hodges v. S.C. & Toof to the stan- to evidence that he adhered (Tenn.1992)); Doe 1 ex rel. Doe 1 see apprais- professional practice dard of Nashville, v. Roman Diocese Catholic ers, provided has evidence (Tenn.2005). 37-38 factual disprove that tends to the Davises’ support position, McGuigan In of his grossly that his actions deviated allegation points deposition to his in which he states ordinary from the of care for an standard that he considered recent sales of homes appraiser. therefore has the Horseshoe Bend subdivision but delib- production satisfied his burden of for sum- erately used homes from the LaurelBrooke mary judgment on this element. thought they pro- subdivision because he Consequently, the Davises must comparison proposed vided better for the “produce specific evidence of facts estab points construction. Mr. also fact lishing genuine issues of material appraisal’s objective use cost summary judgment exist” to show that approach as well as its use of more Martin, not at 84. warranted. subjective comparison approach sales may satisfy their burden of Davises arrive at the value the house. production by: Finally, McGuigan points (1) establishing ma- praisal report, pointing which it to evidence states disputes terial factual that were over- prepared in accordance with the Uniform ignored by moving party; looked or Appraisal Standards of Professional Prac- (2) (“USPAP”). rehabilitating the evidence attacked tice The Tennessee Real Es- (3) Commission, by moving party; producing ad- Appraiser tate which was cre- statute, establishing ditional evidence the exis- adopted ated has the USPAP (4) trial; tence genuine of a issue for professional practice. as its standard for submitting explaining an affidavit Appraisers Real Estate Licensing & Certi- *8 Act, necessity discovery for further pursuant fication ch. 1990 Tenn. Pub. (codified P., to Tenn. R. Rule 56.06. Acts 412-13 as at Civ. amended Tenn. -202); §§ Ann. Code 62-39-201 to Tenn. Quality Id. (quoting McCarley v. W. Food (Lexis Comp. Regs. R. & 1255-5-.01 (Tenn.1998)). Serv., 585, 960 S.W.2d 2010). through May point specific The Davises to several McGuigan affirmatively Mr. has negated genuine facts to establish a issue mate- fact, an including appraisal essential element of the Davises’ cause rial that the re- By pointing action. to evidence that he from SunTrust asked for a “Rush!” quest appraisal; request considered homes in the LaurelBrooke the included the “sales construction, provide comparisons, price” proposed subdivision to better for the which parties agree unnecessary both is for an a home than other homes in neighbor- the appraiser’s analysis; com- hood are worth.
pleted appraisal in less than one busi- To determine specif whether the day; appraisal ness value matched the ic by facts identified the Davises create a price”; “sales and Mr. did not genuine issue of material fact precluding any properties use in the Horseshoe Bend summary judgment, we take the strongest subdivision using compari- when the sales legitimate view of the evidence in favor of son approach to determine the market val- Davises, allow all reasonable infer proposed ue of the construction. favor, ences their and discard all coun
Additionally, point Blair, the Davises tervailing evidence. 130 S.W.3d at deposition Hall, and affidavit of J. Donald Tur- (quoting Byrd v. 847 S.W.2d ner, (Tenn.1993)). an appraiser whom the Davises dis- 210-11 There genuine is a expert closed as an witness testifying on issue of material fact if undisputed their behalf.3 Mr. Turner stated that Mr. facts and inferences drawn in the Davises’ McGuigan failed to conform to the permit USPAP favor person reasonable to reach by failing to properties include from the more than one conclusion. See Staples v. Assocs., Inc., Horseshoe Bend subdivision for compari- CBL & (Tenn.2000). conducting son when comparison sales In reviewing the statements approach. Turner, Mr. Turner placing stated that of Mr. person reasonable can too much reliance on the approach cost to reach different conclusions as to whether appraise proposed construction inappro- Mr. McGuigan deviated from the USPAP priate because a home’s cost of construc- in preparing his appraisal of the Davises’ tion necessarily does not equal proposed home’s home and whether that deviation ultimate value. He stated that an apprais- was enough substantial to amount to a proposed al of construction should include disregard conscious of a substantial and properties comparison from the unjustifiable same risk of such a nature so as to neighborhood prevent overbuilding, gross constitute a deviation from the stan is, spending significantly more to construct dard of care.4 The Davises therefore have McGuigan challenges 3. Mr. Mr. Turner’s affi- 4. The dissent states that "Mr. Turner's testi- allegedly davit contradictory mony regarding based on McGuigan’s state- beliefs or deposition regard- ments his affidavit and performing appraisal intent in should not intentionally whether Mr. had determining be considered in whether the tri- created an inaccurate properly granted al court summary judg- Davises’ home. We conclude that the trial testimony ment" because "Mr Turner's re- denying McGuigan’s court did not err in garding whether Mr. intentionally is, motion to performed strike the statement in the affidavit by inaccurate admission, pursuant to the cancellation rule because the own speculation.” specula- statement in the contradictory affidavit is not testimony tive nature of Mr. Turner's was not deposition. statements in the McGuigan. See raised If it had been Perales, raised, however, Church preclude 169-70 it would not us (Tenn.Ct.App.2000); considering accord Johnston v. Cin- from testimony Mr. Turner’s cinnati, Co., Ry. N.O. & T.P. 146 Tenn. conduct was outside the (1922). Although 240 S.W. appraisers, 435-36 there standard of care for which cannot may appropriate questions regarding speculation. be characterized as isIt on the *9 weight given testimony to be testimony Turner’s at concerning basis of Mr. Turner’s light equivocation, determining trial in of his appraisers the standard of care for that we weight the appropriate recognize genuine the evidence is not a issue of material fact that Martin, summary judgment stage. at the precludes summary judgment based on the S.W.3d at 87. fourth element. genuine misrepresentation, a issue of to discover the which shown that there is transaction, initiated the and the McGuigan party material fact as to whether See, summary judgment the recklessly, specificity misrepresentation. acted id.; Sound, on this element.5 Allied Inc. v. Nee e.g., is not warranted based accord ly, (Tenn.Ct.App. 122-23 iii. 2001). element, the fifth
Regarding
alleged by
of action
the
The cause
McGuigan argues that the Davises cannot Davises, however,
from most inten-
differs
they reasonably
ap
relied on his
show
claims. The
tional
praisal as a matter of law. We must first
allege
Davises do not
at trial
address how the Davises can show
directly
them the value of
represented to
they reasonably
relied on Mr. McGui-
Instead,
McGuigan provid-
the home.
before we can determine
gan’s appraisal
SunTrust,
ed the
and Ms.
pointed
whether Mr.
has
to evi Gnyp,
employee, conveyed
a SunTrust
satisfying
production
dence
burden of
McGuigan’s appraisal
result of Mr.
summary judgment.
Davises. The Davises
turn contend that
they
conveyed
on the
to them
figure
relied
a
reliance
a
person’s
Whether
by
Gnyp,
appraisal report
Ms.
not the
is
a
representation
generally
reasonable
by
prepared
McGuigan,
when
question
requiring
of fact
the consideration
decided to execute the construction con-
E.g., City
of a number of factors.
State
tract.
Inc.,
Reynolds,
Bank v. Dean
Witter
case,
(Tenn.Ct.App.1996).
analogous
In an
States
United
that a
plaintiffs sophistication
per-
factors include
District Court
Kansas held
expertise
subject
seeking
misrepresen-
in the
matter of the
son
to recover for a
representation,
type
relationship—
directly
tation not heard
from the source
fiduciary
par
or otherwise —between the
“must
demonstrate
his or her reliance
ties,
availability
of relevant
original
misrepresenta-
information
on the
fraudulent
representation,
justifiable.”
about the
concealment
tion would have been
DeBoer
Assocs.,
Inc.,
misrepresentation, any opportunity
Appraisal
v. Am.
motion,
disagrees
holding,
opposing
summary judgment
5. The dissent
with this
stat-
al-
ing that "the Davises have been unable to
lowing
par-
all reasonable inferences in that
present any
substantiating
direct evidence
favor,
ty’s
discarding
countervailing
all
their assertion that Mr.
'intention-
Blair,
evidence.
We
reason
disprove
the court’s
this evidence tends
in DeBoer.
deter
Recovery
allegation
should be
Davises’ material factual
represen
reasonably
mined based on the defendant’s
could have
relied on the
tation,
on how
representation
not
It therefore affirmative-
report.
end,
relayed. To that
section
adopt
ly negates
we
an essential element of the
(Second) Torts,
claim,
533 of the Restatement
and Mr. McGuigan
has sat-
entirety,
production
which states
its
isfied
his burden
sum-
*11
Mills,
reasonably relied
at
the Davises could have
mary judgment. See
300 S.W.3d
631; Hannan,
report
at 8-9.
as a statement of a
appraisal
270 S.W.3d
on the
to the value of
expert
disinterested
as
response,
point
In
the Davises
to evi-
at 89.
Staples,
their home.6 See
identify
genuine
dence in the record to
Furthermore,
of
looking at the statements
element.
issue of material fact as to this
affidavit,
Mr. Turner in his
a reasonable
Martin,
They point
at 84.
See
S.W.3d
reach different conclusions as
person could
deposition, in which he stat-
to Mr. Davis’s
to whether Mr.
had reason to
Gnyp conveyed
that Ms.
to him Mr.
ed
communicate
expect that SunTrust would
value for the home
McGuigan’s appraisal
report
to
appraisal
the substance of
representation
and that he relied on it as a
might
that the result
in-
the Davises and
appraiser
proceed-
of a disinterested
when
despite
conduct
fluence the Davises’
ing
They point
with construction.
to the
in Mar-
report’s disclaimer. As we stated
states, “I
in
appraisal report, which
stated
tin,
may conclude
“although a trial court
appraisal report only my personal,
un-
plaintiffs’
particularly
that the
case is not
biased,
professional analyses, opinions,
and
strong,
it is not the role of a trial or
conclusions,”
certify
and “I
to the best
the evidence or
appellate
weigh
court to
my
knowledge
and belief:
state-
judgment
substitute its
for that of the trier
report
ments of fact contained in this
are
of fact.” 271
at 87.
S.W.3d
point
true and correct.” The Davises also
to the
in
statements Mr. Turner’s affidavit
“
iv.
[appraisers
buyers
that
know that
property are interested
and could learn
Regarding the sixth element of
they
at
appraise
value which
that
the Davises’ intentional
property.
that
Appraisers know
those
claim,
contends that
buyers
likely
rely
... are
upon their Davises sold their home for less than its
in making
regarding
conclusions
decisions
superseding
value because of a
construction,
purchase,
or in this case
cause, namely
job
the loss of Ms. Davis’s
of a residence.”
impending
and the
divorce. A
Taking
strongest legitimate
superseding
view
cause “breaks the chain of
Davises,
the evidence in favor of the
proximate
thereby precludes
allow-
causation and
favor,
Lawrence,
all
recovery.”
reasonable inferences in their
White
(Tenn.1998).
evidence, 525,
discarding
countervailing
all
To establish that an
cause,
we
summary judgment
intervening
superseding
hold that
is not
event is a
(1)
warranted based on this element.
See Mr.
must show:
Blair,
(quoting Byrd,
intervening
Act. Tenn.Code Ann.
of Mr.
who
(2001).
complaint,
In their
the Davises do
that Mr.
deviated from the stan
in
allege
McGuigan engaged
not
appraisers
failing
dard of care for
any specific
practice
act or
declared unlaw
include a home from the
Bend
Horseshoe
Assembly
ful
the Tennessee General
comparison.
subdivision as a
We have
Tennessee Code Annotated section 47-18-
negligent misrepresentations
held that
*13
104(b) (2001
such,
Supp.2009).
&
As
to may be found to be a violation of the
establish their Tennessee Consumer Pro
Act,
Tennessee
Protection
see
Consumer
trial,
tection Act claim at
the Davises must
Fayne, 301 S.W.3d at
and that
they
“an
prove
suffered
ascertainable
a particular act is unfair or
“[w]hether
money
...
property
loss of
as a result”
fact,”
deceptive
question
is a
id. at 170.
McGuigan’s “engaging
any
of Mr.
in
...
Viewing
light
the evidence
most favor
practice
deceptive
act or
which is
Davises, drawing
able to the
all reasonable
consumer or to
other person.” Tenn.
favor,
discarding
inferences
their
all
-109(a).
47-18-104(b)(27),
§§
Code Ann.
facts,
countervailing
person
a reasonable
could reach different conclusions as to
Mr. McGuigan contends that
whether Mr. McGuigan’s appraisal was un
deceptive
his actions were neither
nor un
fair or deceptive.
Staples,
See
fair.
‘deceptive
practice’
act or
is a
“[A]
Summary judgment
at 88-89.
therefore is
representation, practice
material
or omis
not warranted based on this claim.7
likely
sion
to mislead a reasonable consum
Russell,
er.”
Ganzevoort
III. Conclusion
(Tenn.1997)
(quoting
Bisson v.
We hold that Mr.
has failed
Ward,
160 Vt.
628 A.2d
satisfy
to
requirements
for
(1993));
Fayne,
see
plication was for three slowed reasons. First, the loan-to-value ratio of their loan I. Second, exceeded 75%. the debt-to-in- and Kimberli Joseph Davis married come ratio of their loan exceeded 38%. September grad- 2000. Both were college Third, recently changed Ms. Davis had were gainfully employed. uates and jobs been employed by and had her cur- twenty-four years Davis worked for as had employer relatively rent for a period short manager a for Motors. finance General of time. These circumstances necessitated years had worked for eighteen Ms. Davis the obtaining additional information from recently as a executive sales but had required Davises and additional internal Their in- changed jobs. combined annual Eventually, bank on approvals. June $158,000. approximately come was approved the bank the loan application. The that would they Davises decided building their marriage by
mark their 18, 2002, for On June with the deadline Even wedding, dream home. before their approach- the locked-in interest rate fast they purchased unimproved corner lot ing, request faxed a resi- the bank for a upscale Horseshoe Bend subdivision appraisal dential to Patrick one McGuigan, $135,000. Following near for Nashville of the six who appraisers regularly per- marriage, they their worked with a custom appraisals formed residential for the bank. 3,940 prepare plans square builder to for a The bank with the provided McGuigan ranch-style foot house with three bed- borrowers, name of the name of the rooms, bathrooms, three and one-half and builder, property. and the address of the many luxurious amenities. The Davises’ It also informed Mr. that $735,000.1 contractor informed them that house “sales was At the price” top $595,394.50 hand, request, would cost to construct. the bank’s written in employees requests appraisers that most for 1. The bank later testified without asked commonplace contradiction it was price” provided. if it was not the "sales price” them to include "sales !”.2 The bank also the bank received provid- the word “Rush When Davises that the appraisal, it informed the plans speci- ed Mr. with the had been proposed property house and fications for the house. $735,000 and that their loan appraised prepare was able to application approved. had been day, largely for the bank in one copy of the request Davises did not a because the loan involved new construc- being writing informed in appraisal despite he exam- Using approach,” tion. “cost re- request copy could of the plans specifications ined the for the any at time. port proposed house and estimated that signed On June Davises planned value of lot and house was cost-plus contract with their contractor in $731,000. also examined they agreed pay plus which comparable the sales of houses in the area of the actual cost of the construction to determine the value of Davises’ new contract did not contain house. This deciding many house. After financing contingencies. Around this same in- planned amenities that the Davises time, against the Davises took out a loan clude in their house were not found in the in their current residence to use equity other houses in the Horseshoe Bend subdi- payment. provided as a down This loan vision, Mr. McGuigan decided to select necessary to sufficient additional funds *15 comparable nearby project in a the and to enable the- complete houses subdivision purchasing to mort- adjusting private called LaurelBrooke. After for Davises avoid gage insurance. the between the differences Davises’ house houses, comparable McGuigan and the Mr. July timely On as a result of the estimated that the market value of the McGui- efforts of the bank staff and Mr. house, according Davises’ if built to the the and the bank held a gan, Davises plans specifications, and would be closing mortgage on the Davises’ loan at $735,000. agreed upon During the rate. the interest closing, signed the Davises a final Uniform 19, 2002, On June for- a Application Residential Loan and Con- copy appraisal report warded a of his and Agreement. struction and Permanent Loan an invoice for to the bank. He in- $325 in following appears disclaimer appraisal copy cluded with his of the “Acknowledgment Agreement” and section Ap- Uniform Standards of Professional application immediately of the loan above (“USPAP”) praisal Practice Compliance signatures: the Davises’ heading “Purpose Addendum. Under the Lender, agents, its successors [T]he Appraisal,” included assigns representations make no or following statement: warranties, express implied, Borrower(s) regarding property, appraisal report prepared This for the property, condition of the or the value of sole and exclusive use of the lender as property. mentioned the client section of this report, mortgage to assist lend- with though provided Even the bank ing decision. It upon is not to be relied copy Davises with a of Mr. by any parties purpose, third closing, at the the Davises did whatsoever. not read or review it. employees appraisal request The bank later testified without with "rush” because it was they regularly contradiction that marked their the nature of the business. claims, new alleged
The construction the Davises’ the Davises substantially complete home June McGuigan had intentionally misrepresen- agreement required 2008. The loan ted the fair market value of their house recertify original apprais- his prepared when he his appraisals substantially al house was com- after the had also Ten- violated the pleted. process viewing This called for nessee Consumer Protection Act. In addi- constructed it comparing house as tion to compensatory damages, the Davises with recent sales of houses. comparable sought punitive either damages or treble On Mr. McGuigan complet- June damages under Tennessee Consumer ed his recertification stating Act. Protection was at house’s value least After year over one of discovery, Mr. opinion. McGuigan filed motion pleased The Davises were with their judgment seeking dismissal of all of the However, new house. in the Fall of supported Davises’ claims. He this motion changed required circumstances the with evidentiary voluminous materials and Davises to reconsider their fi- personal responses the Davises’ state- to his September In nances. the Davises undisputed ment of material facts. The SunTrust applied equi- Bank for a home opposed Davises the motion with eviden- ty pay loan credit In No- card debt. tiary own, materials their affi- including job, vember Ms. Davis lost her experts davits from three regarding the significantly thereby reducing the Davises’ in Mr. McGuigan’s deficiencies sepa- income. The combined Davises also methodology. McGuigan moved to rated in November 2004. strike these three affidavits. The bank declined to approve The trial court heard both the motion to application for a loan equity home *16 strike the affidavits of the three Davises’ top” after a appraisal “desk of their house experts Mr. McGuigan’s for motion that the indicated current market value of 23, summary judgment on February 2 and the house was less than the of the balance During February 23, 2007. 2007 hear loan.3 In mortgage light of their circum- ing, granted the trial court Mr. McGui stances, the Davises retained a realtor to gan’s to motion strike affidavits of two They sell house. their listed the house for experts. of the three Davises’ On March $660,000 and sold the house for to 7, 2007, trial excluding filed an order buyer who the first made an offer. This of the affidavits the two a experts and 8, April on days sale closed 2005. Five separate granting order Mr. a later, 13, 2005, April on Mr. filed for Davis with summary judgment regard to the divorce in Circuit Court for Williamson misrepresentation Davises’ intentional County. Tennessee Consumer Act Protection 20, 2005, April On one week after Mr. claims. divorce, Davis for filed the Davises filed a neg- in the The on complaint proceeded Circuit Court for David- case the Davises’ County seeking damages son to ligent misrepresentation against recover claim Mr. McGuigan. many from Mr. Among McGuigan. Sep- their A trial date was set for $510,000. "desktop” appraisal computer-gener- 3. A ais Davises' house was The face ated based on tax The records. original mortgage amount of loan was desktop performed in the Fall of $580,000. that the of the estimated market value 27, post-summary judgment tember 2007—almost and one-half trial evi- two court’s years filing complaint. after the of the dentiary rulings or its denial of Mr. However, following hearing Septem- a on summary judgment motion for 14, 2007, ber the trial court entered an on the negligent misrepresenta- September determining order on McGuigan, tion claim. v. Davis WL expert that two of the Davises’ witnesses Appeals at *7-9. The Court qualified provide expert opin- were not to explicitly did not address the issue raised regarding ions the standard of care of by McGuigan regarding Mr. the denial of real Ten- appraisers property Middle motion his to strike Turner’s affidavit property nessee or the value of real in opposition filed to the motion for sum- Middle Tennessee.4 Hobbled the exclu- mary judgment. witnesses, expert two of their sion of The Davises filed a Tenn. P. 11 RApp. voluntary a Davises filed notice of the application permission appeal negligent misrepresenta- of their dismissal regard summary judgment dismiss- claim on The September tion 2007. their intentional appeal Septem- Davises filed notice of Tennessee Consumer Protection Act
ber against claims McGuigan. Before the Appeals, Court of McGuigan did not file a Tenn. P. 11 RApp. Davises took issue with the trial court’s However, in application. his brief filed grant decision to sum- after granted appli- this Court the Davises’ mary judgment on their intentional mis- cation permission appeal, representation and Tennessee Consumer McGuigan portion took issue with the They Protection Act claims. also is- took May deny- the trial court’s 2007 order the trial sue with court’s decisions to ex- ing his motion to strike the affidavit of the expert part, clude their witnesses. For his expert opposition Davises’ third filed in objected Mr. McGuigan to the trial court’s summary judgment motion. denial of his motion to exclude the affidavit expert third witness whom the II. oppose
Davises had retained to his sum- Summary judgments are not disfavored mary judgment motion. Bartee, procedural devices. Eskin v. (Tenn.2008); of Appeals opinion Fruge Court filed its on S.W.3d *17 2008, (Tenn.1997). 10, Doe, 408, September concluding that the 952 S.W.2d 410 correctly granted trial court had They provide disciplined process the sum- a mary judgment dismissing the pierce through plead- Davises’ enables courts to the misrepresentation ings fraudulent and Tennes- to determine particular whether a see Protection Act justifies expense Consumer claims. case the time and of a Hall, McGuigan, 208, Davis v. No. Byrd M2007-02242- trial. v. 847 210 S.W.2d (Tenn.1993). COA-R3-CV, 4254150, 2008 WL at *9 Accordingly, summary a 2008). 10, (Tenn.Ct.App. in Sept. judgment proper virtually any Because is civil voluntarily legal Davises had dismissed their case that can be resolved on issues claim, Green, negligent 493, alone. v. 293 Green S.W.3d (Tenn.2009).5 Appeals Court of declined to address 513 example, 4. The record reflects that one of the Davises’ 5. For while this Court has noted warning summary judgments witnesses had received a from the are "almost never regarding option” compensa Tennessee Real Estate Commission an in contested workers’ cases, Inc., engaging appraisal practice. Berry Sys., in unlicensed tion v. Consol. 804
167 grant summary evidence, A court should a judg reviewing the they must first facts, undisputed ment when the as well as determine whether factual disputes exist. reasonably the inferences drawn from the If a exists, factual dispute the reviewing facts, permit party the conclusion that the courts must determine whether the disput seeking summary judgment is entitled ed fact is material to the claim or defense judgment to a as a matter of law. being Griffis by tested the summary judgment Gov’t, Cnty. v. Davidson Metro. 164 motion and whether disputed fact cre 267, (Tenn.2005); 284 Pero’s Steak ates a genuine issue for trial. Eskin v. Lee, 614, & Spaghetti House v. 90 S.W.3d Bartee, 732; 262 S.W.3d at Cumulus (Tenn.2002). 620 A seeking defendant a Broad., Shim, 366, Inc. v. 226 S.W.3d 374 summary judgment is judg entitled to a (Tenn.2007); McCarley v. Quality W. when, ment relying as matter of law Serv., (Tenn. 585, Food 960 S.W.2d 588 facts, the undisputed “affirmatively it ne 1998). However, no factual dispute exists gate[s]” an plain essential element of the when undisputed facts and the infer tiffs case or when it “show[s]” ences drawn from the undisputed facts plaintiff prove cannot an essential element permit a reasonable fact-finder to reach of its claim at trial. Hannan v. Alltel only one factual conclusion. Gossett v. Co., 1, (Tenn.2008). Publ’g 270 S.W.3d 9 Co., Tractor Supply 320 S.W.3d An granting order judgment (Tenn.2010); Giggers v. Memphis Hous. is not presumption entitled to the of cor Auth., (Tenn.2009). 277 S.W.3d Mountain, rectness on appeal. v. Stanfill 179, 184-85 (Tenn.2009); 301 S.W.3d Amos III. v. Metro. Gov’t Nashville & Davidson (Tenn.2008). Cnty., 259 S.W.3d We turn first to the issue by raised Mr. case, Accordingly, in each appellate MeGuigan regarding the admissibility of courts must make a fresh determination one of the affidavits by offered the Davises requirements that the of Tenn. R. Civ. P. oppose his motion for summary judg- Green, 56 have been met. Green 293 ment. Mr. MeGuigan asserts that the trial 514; Assocs., S.W.3d at Staples v. CBL & court erred denying his motion to strike (Tenn.2000); 15 S.W.3d Mason v. prepared by affidavit6 J. Donald Tur- Seaton, (Tenn.1997). ner, one of the experts, in an effort to up shore his earlier deposition. Appellate reviewing courts a summary The resolution of this issue affects judgment must consider the evidence facts that can properly be considered in light most favorable non-moving determining party whether Mr. en- MeGuigan and must draw all reasonable infer- judgment titled to a non-moving ences as a matter party’s favor. of law Inc., Transp., regard Mills v. CSX to the Davises’ intentional *18 627, (Tenn.2009); 632 misrepresentation Martin v. S. and Tennessee Consum- Norfolk 76, (Tenn.2008). Ry., 271 S.W.3d 84 When er Protection Act claims. 445, (Tenn. 1991), S.W.2d 446 we have af 6. A proper motion to strike is the vehicle for summary judgments firmed in workers’ com challenging admissibility the of evidence at pensation seeking cases when party the the summary judgment the stage proceed- of the
judgment complied require has with all the al., ing. 11 James Wm. Moore et Moore’s ments of Tenn. R. Civ. P. 56. v.Wait Travel § Federal Practice and Procedure 56.14[4][a] Co., 220, (Tenn. ers Indem. 240 S.W.3d 230 (3d ed.2009). 2007); 317, Dye Corp., v. Witco (Tenn.2007). 322-23 168 addressed, questions threshold been
A.
have
may
trial court
then determine wheth-
the
sufficiency
evidentiary
legal
The
er,
of the admis-
taking
strongest
view
in the
when a court con
materials
record
non-moving
in favor of the
sible evidence
summary judgment
siders a
motion is of
of
party,
any genuine
there remain
issues
pivotal
importance. Affidavits are the
most common form of evidence submitted
Byrd
decided at trial.
material fact to be
summary
stage.
at
10A
judgment
Hall,
v.
B. cross-examination, it does support not Mr. Mr. asserts that the trial McGuigan’s claim that Mr. opin- Turner’s by court erred failing to exclude Mr. Tur- ion regarding the market value of the First, ner’s grounds. affidavit on two he Davises’ house is so lacking in evidentiary insists that Mr. Turner’s opinion regarding support that it should have been excluded. the market value of the Davises’ house is also insists that Mr. Tur- flawed because it is not based on the plans ner’s deposition testimony is in such con- specifications for the Davises’ house flict with his later affidavit that the trial prepared by that were Mr. Frasch. Sec- court should have held that were both ond, he asserts that there anis irreconcil- inadmissible. argument This premised is able conflict between Mr. Turner’s affida- on what commonly referred to as the deposition vit and his that undermines the “cancellation contradictory state- rule”— admissibility of both. by ments the same go witness that unex- In his affidavit opposition submitted in plained or uncorroborated other evi- McGuigan’s to Mr. summary judgment dence cancel each Taylor other out. v. motion, Mr. Turner opined that the market Co., Publ’g Nashville Banner value of the Davises’ house when Mr. 476, 482-83 (Tenn.Ct.App.1978). While McGuigan appraised it in June 2002 for the cancellation rule applies to a witness’s $550,000. really Mr. McGui- deposition and affidavit filed in support of gan insists that the trial court should not opposition or in ato motion for summary permitted have give Turner an judgment, the court must view the chal- opinion regarding the market value of the lenged light evidence in a most favorable house because Mr. Turner was provid- not opponent to the of the judgment ed with the information necessary Smolin, motion. Helderman and, praise therefore, new construction 502 (Tenn.Ct.App.2005); Mr. Turner “did not follow his own stated Perales, Church v. method appraising new construction.” (Tenn.Ct.App.2000). prepared Turner his affidavit after During deposition his January deposed. he was While several of his an- 2007, Mr. quite Turner was diffident swers to about questions during deposition his whether Mr. intentionally are had ambiguous with regard to the docu- an created inaccurate appraisal ments he consulted in order to arrive at Davises’ house. His appraised house, value of the answer was essential- ly, later, “I days Mr. Turner states don’t know.” Three unequivocally in his affi- signed davit that he Turner complaint, stating, reviewed the an affidavit in part, answer, I responses “[w]hile don’t know whether he [Mr. Davises’ first interrogatories McGuigan] intentionally set of provided an inac- requests production documents, value, appraised curate I do believe that he the transcript of Mr. McGuigan’s deposi- knowingly performed using tion and the deposition. exhibits to the methods not in conformance with reliable
170 Mr. industry might performed appraisal, standards in the or have accepted asked, you Turner was think that’s “[d]o with USPAP answered, happened?” what Mr. Turner certainly are While these statements know, I “I don’t know. You that’s what equivocal, they necessarily are not contra- said, you I can’t tell what was his inten- dictory. The crux of Mr. Turner’s testi- possibility tion. I said this was a that it mony, light viewed in the most favorable to I happened, could have but have no idea.” Davises, that, he un- although is In evi the context of medical causation Mr. of inten- willing to accuse requires expert opinion, dence that an this inaccurate tionally providing appraisal, expert physician’s has noted that an Court McGuigan “knowing- he believed that Mr. testimony as to what “is is no possible ly” accepted practices by from deviated opinion evidence at all” because as to “[h]is selecting comparable properties his from possible what is is no more valid than the rather than the LaurelBrooke subdivision jury’s speculation own as what is or is may from Horseshoe Bend. While there possible.” Lindsey not v. Miami Dev. very regard- appropriate questions well be (Tenn.1985) 856, Corp., 689 S.W.2d 862 weight given to be to Mr. Turner’s Bar, Fearnot, (quoting v. Palace Inc. 269 testimony, determining weight (1978)). 405, 858, Ind. 381 N.E.2d 864 A appropriate evidence is not at the sum- corollary opinions to the lack of value of mary judgment stage. Downs ex rel. Bush, regarding “possibilities” experts is that are v. Downs 815 (Tenn.2008); Patterson, permitted give opinions regarding not v. Wilson the ultimate if issue of fact the fact-finder (Tenn.Ct.App.2001). Mr. capable drawing its own conclusions deposition testimony Turner’s and affidavit expert testimony. without the aid of State fatally are not so inconsistent (Tenn.Crim. Turner, should be treated as “no evidence” at all. Cincinnati, App.2000); see also 10B Federal Practice See Johnston v. N.O. & T.P. & Procedure at 345-46. Ry., 146 Tenn. S.W. (1922) (reversing jury decision based on principles applicable These are here. unexplained, testimony). inconsistent testimony regarding Turner’s whether intentionally performed an
C. is, by inaccurate his own admis- sion, Even though speculation. Mr. Turner’s statements in He is qualified no more his deposition jury and affidavit are not self- than the to determine what Mr. cancelling, they suffer from another fatal believed the real market value flaw plainly evident Mr. Turner’s own of the Davises’ house Significant was. testimony. during deposi- When asked his of Mr. portions opinion testimony Turner’s tion whether opinion nothing conjecture it was his amount to more than McGuigan intentionally performed McGuigan’s an inac- about Mr. beliefs and intent. Thus, appraisal, responded: curate Mr. Turner speculative because nature of say “I would performed testimony, that he an inaccu- Mr. Turner’s the trial court rate appraisal. Now was it intention erred failing portions strike the not, being pressed I don’t know.” After his deposition regarding and affidavit to explain your opinion goes,” McGuigan’s “how far and intent. Accord- beliefs know, “[y]ou Turner replied, just ingly, testimony regarding I can’t Mr. Turner’s read another After appraiser’s per- mind.” beliefs or intent speculating about how Mr. McGuigan forming appraisal should not be con-
171
trial
have
determining
present
sidered in
whether the
been unable to
any direct
granted
summary judg-
properly
court
evidence substantiating
their assertion
dismissing
ment
the Davises’ intentional
that
McGuigan
reck-
“intentionally or
and
Con-
misrepresentation
Tennessee
lessly misrepresented that his best esti-
Act
against
sumer Protection
claims
mate of the value of the plaintiffs’ pro-
McGuigan.
$735,000.”
posed construction was
The Davises assert
that the inferences
IV.
undisputed
from four
facts
suffi-
should be
appeals involving
Unlike other recent
jury
cient to
question
regard
create
with
summary judgments that have
con-
been
McGuigan’s
to Mr.
state of
he
mind when
Court,7
this
sidered
this case
not
does
performed
appraisal.
They
point
first
require
analyze
the Court to
whether Mr.
undisputed
fact
that SunTrust
party
as the
sum-
McGuigan,
seeking the
request
marked its
the appraisal
mary judgment, presented sufficient evi-
“Rush!”
it
request
when
faxed the
to
successfully
dence to
shift the
burden
Second,
June
they
on
2002.
production to the Davises. The Davises do
point out
the request
that
for an appraisal
that
dispute
not
successful-
stated
price”
$735,000.
that the “sales
was
ly
production
shifted
burden of
to
Third, they
out
point
that Mr.
Accordingly,
proper-
them.
the Court has
based
in
appraisal,
part,
his
on properties
out
ly pointed
as the
McGuigan,
in
rather
LaurelBrooke
than in Horseshoe
moving party,
pre-
carried his burden of
Finally, they point
Bend.
out that
senting
that
essen-
negated
evidence
two
completed
returned
tial elements of the Davises’ intentional
praisal
day
only one
later on June
2002.
misrepresentation claim. These elements
The parties’ lengthy and detailed discov-
Mr. McGuigan’s
relate
intent
ery places
four
these
facts
clear context.
when he
knowledge
prepared the appraisal
It
undisputed
mortgage
that the bank’s
and the reasonableness of the Davises’ re-
processors frequently marked their
re-
liance on Mr.
The
appraisal.
quests for
with
appraisals
“rush” because
pivotal question is whether
the Davises
it was the nature of the
With
business.
have succeeded
exis-
demonstrating the
loan,
regard to the Davises’
time
be-
was
genuine
disputes
tence of
material factual
coming of
essence in
mid-June because
expense
warrant
time and
of a
July
of the
dead-
fast-approaching
they
trial.
I have concluded that
not.
have
agreement
line on the lock-in
on the loan’s
quick completion
interest rate. The
of the
A.
parties
enabled the
to close
recipients
allegedly
of an
fraudulent
July
loan on
2002.
may
damages
recover
only
prove
person making
uniformly
if
that the
also
The witnesses
testified
recklessly,
the representation
commonplace
did so
it
was
include
false,
knowledge that
it was
without
While
price”
appraisal requests.
“sales
representation
belief that
true.
ex-
number of
witnesses could not
Truck,
Walker v. Sunrise
plain
practice,
Pontiac-GMC
the reason for the
there was
Inc.,
(Tenn.2008); Re
disagreement
little
that when the sales
(1977).
(Second)
provided,
statement
price
appraisers
Torts
was not
most
efforts,
best
Despite
regularly
their
the Davises
called
obtain it. The Davises
See,
Co.,
S.W.3d at 8-9.
e.g.,
Publ'g
Hannan v. Alltel
opinion, materiality
opinion,
were unable to uncover
evidence
*22
relationship
parties
piv-
would enable a reasonable fact-finder to the
assume
along
that the bank
the
passed
conclude
significance.
purpose
otal
For the
of this
for which it
price”
properties
assumed,
“sales
despite
I have
scant con-
appeal,
sought appraisals
prompt
in order to
its
evidence,
of
temporaneous
that the amount
appraisers
provide
appraisal
an
for the
the
fair market value of the
appraised
price.”
amount of the “sales
regard
Davises’ house was material with
the loan transaction between the Davises
com-
McGuigan’s
regarding
choices
and the bank.
closely
were
scrutinized
parable properties
discovery.
Davises’
during
Several of the
parties
the
relationship
The
between
his choices.
skeptical
witnesses were
of
the
in Sunderhaus
opinion
and the form of
However, none
the Davises’ witnesses
of
Lowenstein,
v. Perel &
215 Tenn.
provided
testimony
admissible
that Mr.
(1965)
from
S.W.2d 140
differ markedly
comparable properties
selected
relationship
the Davises and
between
purpose
inflating
for the
the amount of
of Mr. McGui-
McGuigan and the form
appraisal
his
to coincide with the “sales
Sunderhaus,
In
the seller
gan’s appraisal.
price”
request
listed on the bank’s
for an
ring,
directly
of a
to benefit
who stood
appraisal.
transaction, provided
buyer
from the
Finally, there is no evidence in the rec-
warranty guaranteeing
written
the value of
casting suspicion
ord
on the fact that Mr.
ring.
Sunderhaus v. Perel & Lowen
McGuigan completed
appraisal
his
one
stein,
was “estimated” B. addition, property. In the bank was Mr. client. In their McGuigan’s pre- sole both recipients of an fraudulent allegedly liminary applications, and final loan misrepresentation may only recover if that neither the bank nor their Davises certified representation reliance on the agents representa- of its “made ... justifiable. reasonable or Walker v. Sun- warranties, Truck, Inc., express implied, rise tions or Pontiac-GMC Borrower(s) 311; (Second) regarding property, at Restatement of Torts 537(b) (1977). § alleged property, the condition of the or the value misrep- When opinion, resentation is an the form of the of the property.”9 62-39-102(16) parcel 8. See also Tenn.Code Ann. identified of real estate or identified property particular point in defining real at a time.” appraisal” analy- "an “valuation as sis, opinion prepared by or conclusion a real completed signed 9. The Davises the final appraiser estate that estimates the value of an Gnyp application loan after Ms. informed fact, All the terms and conditions place any reliance on Mr. McGui- transaction available were to the Davises gan’s appraisal. closing.
before the A of Mr. copy McGui- C. gan’s appraisal was likewise available to However, they requested them had it. Based on undisputed facts in this Davises never talked with record, estimate of the nor read until after this dis- fair market value of the Davises’ house— pute arose even though they received a only which was more than the com- *23 copy 2, at the closing July on 2002. The bined amount of the cost of the lot and the legal import and effect of the documents estimated construction cost of the house— embodying parties’ rights the and obli- opinion. was an Even though opinion gations in a transaction are not under- provide can the basis for a fraudulent mis- by party’s mined decision not to read the claim, representation the undisputed facts documents. See De Ford v. Nat’l & record, Life in this and the inferences reason- Co., 255, 266-69, Accident Ins. 182 Tenn. ably facts, drawn from these support only (1945) 617, 185 S.W.2d 621-22 (holding the following First, conclusions. based on person that a ordinarily cannot avoid a the plain terms of all the documents in contract on ground the that he did not transactions, their loan the Davises could it); Huestis, Moody Realty read Co. v. 237 not, law, as a matter or rely on Mr. McGui- (hold- S.W.3d 676 (Tenn.Ct.App.2007) gan’s appraisal of the fair market value of ing that signs one who a contract cannot Second, their house. the Davises have plead ignorance later of its contents if presented no admissible evidence that Mr. there opportunity was an to read it before McGuigan prepared his appraisal of their Thus, law, signing). as a matter of recklessly house or knowledge that he presumed Davises are to have been aware had not applicable followed appraisal stan- of the disclaimers that were contained in dards or that he did not believe the conclu- the loan documents. sion in appraisal that the fair market house, value of
It the Davises’ if entirely undisputed completed accordance with the plans specifica- Davises never talked with Mr. tions, $735,000. would be Finally, and did not read or review his prior presented Davises closing July no evidence that By admission, influenced, McGuigan’s appraisal their own was di- Davises could only rectly indirectly, by have relied on the the bank. statement of the Accord- ingly, the employee summary judgment bank project dismissing that their had $735,000. praised Davises’ intentional misrepresentation The prop- Court has erly that, claim should be pointed out affirmed. purpose of an claim, intentional misrepresentation Y.
plaintiff rely must “on the rep- defendant’s resentation, not on how representation In addition to their misrepre- fraudulent relayed.” circumstances, claim, Under these sentation allege the Davises only conclusion that a reasonable fact- violated the Tennessee (codified finder can draw from the undisputed facts Consumer Protection Act of 1977 not, this record is that the Davises did as §§ amended at Tenn.Code Ann. 47-18- Frasch, them that specifications had estimated prepared by would home, $735,000. the fair market value of their if con- structed plans in accordance with the (2001 Vincent, 177; Holladay 301 S.W.3d at Supp.2009)). 101 to -180 & Claims (Tenn.Ct.App. alleged Speed, Act must be with the under this 2005). deceptive practice A act or is an specificity applicable same to fraud claims. Co., practice act or “that causes or tends to Harvey v. Ford Motor Credit to believe what is false (Tenn.Ct.App.1999); cause a consumer S.W.3d Terrace, Inc., that misleads or tends to mislead a Humphries v. End 795 or West consumer as to a matter of fact.” Tucker (Tenn.Ct.App.1990). Builders, 109, 116 complaint alleges, in the most v. Sierra terms, An act is “unfair” general (Tenn.Ct.App.2005). “ac- likely it causes or is to cause sub tions in connection with the of when injury to subject home constitute an unfair and stantial consumers which is not easily by the consumers them deceptive practice.” trade avoidable outweighed by selves and is not counter Assembly The Tennessee General has vailing compe benefits to consumers or to forty-seven specific types identified of acts *24 Builders, tition. Tucker v. Sierra 180 practices or that violate the Tennessee (citing S.W.3d at 116-17 15 U.S.C. However, Consumer Protection Act.10 45(n)). § Assembly General was aware that “[f]raud many shapes, disguises generality assumes and sub Because of the of their com- 11 terfuges” plaint, and that even as one fraud is I have assumed that the Davises’ proscribed, defined and another variant Tennessee Consumer Protection Act claim appears.12 Accordingly, against is on Tenn. Tennessee based 47-18-104(a), § broadly pro Consumer Protection Act also Ann. Code TenmCode 47-18-104(b)(27), § engaging scribes act or Ann. or practice both. As the deceptive litigation progressed which is unfair or to the consum and the were Davises 47-18-104(a), § required er. Ann. to state their claim specifi- Tenn.Code more (b)(27). cally, it became clear that their complaint against chiefly based The Tennessee Protection Consumer that purposely on their belief he inflated Act provide single does not standard appraisal equal price the sales listed applicable to all circumstances for deter appraisal on the bank’s request by improp- mining particular practice whether a act or erly selecting properties neighbor- in the is unfair deceptive purpose or for the ing subdivision of LaurelBrooke to use as 47-18-104(a) § Tenn.Code Ann. or Tenn. comparable properties. 47-18-104(b)(27). § Fayne Ann. Code Vincent, (Tenn.2009). 162, 301 177 Davises have not leveled claims of circumstances, In proper negligent predatory lending practices against misrepresentations may they constitute an un bank. Neither have asserted that the fair deceptive practice. Fayne conspired act or v. bank with Mr. to ob- 47-18-104(b) (West (1963) 30, § (quoting 10. See Tenn.Code Ann. 237 a June 1759 letter stating from Lord Hardwicke to Lord Kames 2010). infinite, and were a Court of "[f]raud rules, Hodges, Equity lay they Tenn.App. 11. Waller v. once to down how far 265, (1958) farther, Henry go, (quoting extending would no their Gibson, 456, it, Chancery § R. against strictly Gibson’s Suits in spe- relief or to define (5th ed.1955)). it, at 520 jurisdiction cies or evidence of would cramped, perpetually eluded new Bureau, fertility Capital SEC v. schemes which the of man’s invention Gains Research contrive”). U.S. 193 n. 84 S.Ct. 11 L.Ed.2d would appraisal project tain an inflated of their appraisal only stated that it was an “esti- purpose inducing for the them to bor- mate.” money row to construct a house that would token, By the same the manner in which be worth less than it cost to build. Nor Mr. McGuigan prepared his appraisal was they presented have admissible evidence not unfair for the purposes of Tenn.Code appraisers must base an appraisal of 47-18-104(a). Ann. Adopting a broad the market value of real property in a principle that appraisers of real property particular subdivision only on comparable can be held liable whenever the actual property real in the same subdivision. At price sales property is less than its most, proved have that other appraised value will result in “defensive appraisers might not have selected the appraising which would depreciate loan same houses as comparable properties values to the detriment of would-be bor selected or that other ap- rowers.” Young v. Leader Fed. Sav. & praisers might have adjust- made different Loan Ass’n, 89-47-II, No. 1989 WL comparable ments to the properties than 1989) (No at *6 (Tenn.Ct.App. June Mr. McGuigan did. filed). Tenn. R.App. application P. 11 Ac An property of real is not the cordingly, I would affirm the summary
result of analysis, a scientific but rather it judgment dismissing the Davises’ Tennes “subjective is a opinion which can and does see Consumer Protection Act claim against differ from [one the next to] McGuigan. *25 appraisal even though may both be based on real estate market trends.” In re Reh VI.
bein, (Bankr.D.Mass. 49 B.R. 1985). Even the United Supreme States The undisputed record, facts in this to- Court has noted that “common experience gether with the reasonably inferences discloses that compe facts, witnesses the most drawn from these support lower widely tent often differ as to the value of courts’ conclusion lot; any particular and there is no or fixed entitled to a dismissal of the Davises’ in- certain standard which the real value tentional misrepresentation claim and Ten- can be ascertained.” Montana Ry. v. nessee Consumer Protection Act claim as a Warren, 137 U.S. 11 S.Ct. 34 matter of law. I Accordingly, respectfully (1890). L.Ed. 681 Accordingly, is not “[i]t part company my colleagues and con- surprising many how different results are clude that the summary judgment dismiss- had when more person than one looks at a ing the misrepresenta- Davises’ intentional piece Rehbein, of real estate.” In re 49 tion and Tennessee Consumer Protection B.R. at 252. against Act claims Mr. McGuigan should be affirmed.
Based undisputed on the facts in this record and the inferences can be rea I am authorized state that Jus- Chief sonably facts, drawn from only these tice CLARK opinion. concurs this reasonable conclusion to be drawn is that appraisal of the Davises’ house was not deceptive purposes for the 47-18-104(a) §
of Tenn.Code Ann. 47-18-104(b)(27) Tenn.Code Ann. be cause it did not contain a false or mislead ing statement of fact. Mr. McGuigan’s