Ouzts v. WomackOuzts v. Womack
delivered the opinion of the Court,
This сase involves alleged fraud in the sale of real estate. The sellers completed a residential disclosure statement indicating that the subject property had no flooding problems. The sellers then bargained to include language in the deed disavowing any previous representations concerning the property’s condition. The buyer accepted these terms. After the buyer took possession, the property flooded. The buyer filed suit against the sellers, alleging fraudulent concealment and misrepresentation. The sellers filed a motion for summary judgment, which was granted. We affirm, holding that the buyers are bound by the unambiguous terms of the contract for sale and the deed.
In April 2000, Defendants/Appellees Michael L. Womack (“Womack”) and Victoria A. Raub (“Raub”), husband and wife, listed their residence at 516 St. Nick Drive, Memphis, Tennessee (“the Property”) for sale. At that time, Womack and Raub completed a residential disclosure statement, which indiсated in part that the property was not subject to flooding. Plaintiff/Appellant Steven R. Ouzts (“Ouzts”) became interested in purchasing the Property, but was concerned that it might be subject to flooding. His real estate agent inquired about flooding, and the sellers’ agent responded that they had not experienced any floоding problems.
Ouzts made an offer to purchase the Property. Womack and Raub counter-offered, adding the condition that after closing they would “have nо further obligation or responsibility to [Ouzts] for the condition of the Property” and that the deed would contain language to that effect. The counter-offer recited the language to appear in the deed:
Notwithstanding anything to the contrary contained in this deed, it is understood and agreed that the Property is being сonveyed without any representation or warranty of any kind by Grantor except as expressly set forth herein. Grantor has not made and does not hereby mаke (except as expressly set forth herein) any representations or warranties of any kind or character whatsoever, express or implied, with respect to the property, its condition (environmental or otherwise), uses or fitness for any particular purpose, and Grantor hereby disclaims and renounces any such representation or warranty and by Grantee accepting the Property, Grantor is forever discharged therefrom.
The counter-offer noted that these provisions “shall survive the closing and be binding upon the parties, their successors, successors in title, heirs and assigns.” Ouzts reviewed the counter-offer and accepted it on June 14, 2000. On July 28, 2000, Womack and Raub executed a Special Warranty Deed containing the exculpatory language set forth in the сontract for sale.
On August 12, 2002, the Property purchased from Womack and Raub was damaged by significant flooding. On July 26, 2002, Ouzts filed a lawsuit against Womack and Raub, as well as the listing agent and agency for the Property.
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In the lawsuit, Ouzts asserted that Womack and Raub were aware that the Property was subject to flooding, but fraudulently concealed this fact and made material misrepresentations by failing to disclose the flooding problem on the residential disclosure statement. Ouzts sought rescission оf the contract, as
Womack and Raub filed motions for summary judgment, arguing that the exculpatory language of the contract and deed shielded them from a lаwsuit arising out of the condition of the Property, and additionally that the statute of limitations had run on Ouzts’ claim. The trial court granted the motion for summary judgment, noting, “there is specific language in the warranty deed which is a part of the transferring document, which clearly states that the defendants did not make any representations as to any of the conditions [of] which the plaintiff is complaining.” The trial court concluded, “[I]t doesn’t appear as though the Court can perceivе any basis upon which the plaintiff could succeed in an action against these defendants.” The trial court did not rule on the statute of limitations defense. From that order, Ouzts now appeals. 2
On appeal, Ouzts argues that there are genuine issues of material fact as to whether Womack and Raub knew that the Proрerty had a flooding problem. Ouzts asserts that this disputed fact is material because the representations in the residential disclosure statement and by the sellers’ agent that the Property was not subject to flooding induced him into accepting the exculpatory language in the contract for sale and the Spеcial Warranty Deed. Therefore, Ouzts maintains that the trial court erred in granting the motion for summary judgment.
A motion for summary judgment should be granted when the movant demonstrates that there are no genuine issues of material fact and that the moving party is entitled to judgment as a matter of law.
It is well settled that “еxculpatory clauses are valid in Tennessee and are not against the public policy of this state.”
Burks v. Belz-Wilson Props.,
It is undisputed that the question of whether to insert this language was a significant issue in the negotiations on the contract for sale. In this case, the language in the Special Warranty Deed is clear and unambiguous: “Grantor has not made and does not hereby make (except as expressly set forth herein) any representations or warrantiеs of any kind ... with
In this appeal, Womack and Raub seek an award of sanctions against Ouzts and his legal counsel under Rule 11 of the Tennessee Rules of Civil Procedure for a frivolous appeal. We decline to do so.
The decision of the trial court is affirmed. Costs of this appeal are taxed against the appellant Steven R. Ouzts and his surety, for which execution may issue, if necessary.