August 28, 2007

Puffing does not negligent misrepresentation make, even in the new home construction context

O. HOGAN HARRISON, ET AL. v. AVALON PROPERTIES, LLC, ET AL. (Tenn.Ct.App. August 27, 2007).

Hogan Harrison and Sally D. Harrison ("Plaintiffs") sued Avalon Properties, LLC ("Avalon Properties"), Avalon Golf Properties, LLC ("Avalon Golf"), and Usonia Homes, Inc. ("Usonia") for breach of contract and negligent misrepresentation, among other things, in connection with the construction of Plaintiffs' house. Plaintiffs were granted a default judgment against Usonia for its failure to answer the complaint. After a bench trial, the Trial Court entered an order of involuntary dismissal pursuant to Tenn. R. Civ. P. 41.02 as to Avalon Properties. The Trial Court also entered a Final Judgment incorporating by reference the Trial Court's Opinion finding and holding, inter alia, that Avalon Golf made representations to Plaintiffs through its agent that Usonia was qualified to build the house and implicitly vouched that Usonia had the ability to fund the work; that the representations were made with the intent to induce Plaintiffs to rely on them; that Plaintiffs did rely on the representations to their detriment and were damaged; and that Avalon Golf was negligent in the selection of Usonia as the exclusive builder. The Trial Court awarded Plaintiffs a judgment of $164,065.87. Avalon Golf appeals to this Court. We reverse that portion of the Trial Court's judgment holding Avalon Golf liable for negligent misrepresentation and negligent selection, and affirm as to the other defendants.

Opinion can be found at TBA website: