October 26, 2010

TN Supreme Court Reviews Whether an Appraisal can Form the Basis of a Fraudulent Misrepresentation Claim

JOSEPH DAVIS ET AL. v. PATRICK J. McGUIGAN ET AL. (Tenn. October 26, 2010)

This appeal arises from a trial court's grant of summary judgment in an action against a real estate appraiser for fraudulent misrepresentation and for violation of the Tennessee Consumer Protection Act. A husband and wife alleged that the appraiser, who was hired by the bank financing the husband and wife's home construction, recklessly overestimated the value of their proposed construction and that they reasonably relied on the appraisal value to their detriment.

The Court of Appeals affirmed the trial court's ruling, holding that an appraisal is an opinion that cannot form the basis for a fraudulent misrepresentation claim. We hold that an opinion can form the basis of a fraudulent misrepresentation claim. We further hold that genuine issues of material fact preclude summary judgment as to the husband and wife's claims against the appraiser. We reverse the Court of Appeals and remand the case to the trial court for further proceedings consistent with this opinion.

Opinion may be found at:

KOCH and CLARK, dissenting: