Court reviews a case involving the TCPA, rules that a violation of the Act requires more than submitting invoices for work which was not performed or poorly performed

MARK BREWER ET AL. v. KITCHEN DESIGNS AND CABINETRY ET AL. (Tenn. Ct. App. April 8, 2013)

General contractor filed breach of contract action against homeowners, alleging the homeowners failed to pay invoices on an extensive home renovation project. The homeowners denied there were outstanding invoices and filed counterclaims for breach of contract and violation of the Tennessee Consumer Protection Act against the general contractor and its owner, in his individual capacity, who contractually agreed to supervise the project for an additional fee. The homeowners alleged the general contractor failed to perform the contract in a workmanlike manner; they also asserted a claim against the owner asserting that he agreed to personally supervise the project for a percentage of the contract and that he breached his agreement by failing to properly supervise the work.

The trial court, Judge Barbara Haynes presiding, awarded summary judgment to the homeowners on all claims and counterclaims. On the homeowners’ counterclaims, Judge Haynes also awarded treble damages, attorney’s fees, and costs, pursuant to the Tennessee Consumer Protection Act. The counter-defendants filed a motion to alter or amend the decision as to the counterclaims; however, Judge Haynes retired before ruling on the motion. The case was then assigned to Judge Hamilton Gayden and, following a hearing, he denied the motion to alter or amend.

The counter-defendants appealed. We affirm the summary dismissal of the general contractor’s breach of contract claim for it is undisputed the homeowners paid the contract amount in full.

As for the homeowners’ counterclaims, we affirm the grant of summary judgment in favor of the homeowners on their breach of contract claim against the general contractor and the award of damages for failing to perform the contract in a workmanlike manner.

We also affirm the grant of summary judgment in favor of the homeowners against the supervisor for failing to properly supervise the work; however, we find the evidence insufficient to establish the damages that proximately resulted from the supervisor’s breach as distinguished from the damages resulting from the general contractor’s breach.

As for the homeowners’ claims that the general contractor and the supervisor violated the Tennessee Consumer Protection Act, we have determined there are material facts in dispute concerning whether the contractor or the supervisor used or employed unfair or deceptive acts or practices in violation of the TCPA; therefore, summary judgment as to the TCPA claims was not appropriate.

We, therefore, reverse the grant of summary judgment on the TCPA claims as to the contractor and the supervisor and remand these claims, and the determination of damages for failing to properly supervise, for further proceedings.

Opinion available at:
https://www.tba.org/sites/default/files/brewerm_040813.pdf

Court reviews whether the UCC or the TN Consumer Protection Act applies in a breach of contract case

AUDIO VISUAL ARTISTRY v. STEPHEN TANZER (Tenn. Ct. App. December 26, 2012)

This is a breach of contract case. Appellant/Homeowner contracted with Appellee for the installation of a “smart home” system. After myriad problems arose, Appellant fired Appellee, who filed the instant lawsuit to collect the unpaid balance for equipment and installation.

The trial court determined that the primary purpose of the parties’ agreement was the sale of goods and applied Article 2 of the Uniform Commercial Code. The court granted judgment in favor of Appellee, but allowed certain offsets for items rejected by Appellant.

Appellant appeals, arguing that the trial court erred in applying the UCC, and in its calculation of damages. Appellant also appeals the trial court’s determination that the Tennessee Consumer Protection Act does not apply. Discerning no error, we affirm.

Opinion available at:
https://www.tba.org/sites/default/files/audiovisual_122612.pdf

Court reviews the damages awarded in a case involving the defective construction of a home

BROOKE BUTTREY v. HOLLOWAY’S, INC., ET AL. (Tenn. Ct. App. December 13, 2012)

A homeowner sued builders for the defective construction of a house, alleging breach of contract, intentional misrepresentations, and violations of the Tennessee Consumer Protection Act.

The trial court dismissed the Tennessee Consumer Protection Act claims, but found the builders liable for intentional misrepresentations and breach of the contract by failing to build the house in a workmanlike manner. The trial court awarded the homeowner the full amount she paid to have the house built as well as her attorney’s fees.

The builders appealed, claiming the evidence did not support the amount of damages awarded, the evidence did not support the court’s finding of intentional misrepresentation, and the homeowner was not entitled to attorney’s fees.

We modify the damages awarded to the homeowner to conform to the evidence presented. We reverse the court’s award of attorney’s fees, and we reverse the court’s finding that the builders intentionally misrepresented material facts.

Opinion available at:
https://www.tba.org/sites/default/files/buttreyb_121312.pdf

Court reviews Consumer Protection Act and Breach of Warranty claims against a builder

MARK T. WICKHAM v. SOVEREIGN HOMES, LLC (Tenn. Ct. App. September 25, 2012)

Plaintiff homeowner brought an action against Defendant builder alleging, inter alia, breach of warranty and violation of the Tennessee Consumer Protection Act. The trial court awarded summary judgment to Defendant builder. We affirm summary judgment on Plaintiff’s breach of warranty claim; reverse summary judgment on Plaintiff’s Consumer Protection Act claim; and remand for further proceedings.

Opinion available at:
https://www.tba.org/sites/default/files/wickhamm_092512.pdf

Court reviews whether a home builder failed to construct a home in a workman like manner, in breach of contract, warranty, and the TN Consumer Protection Act

DAN C. RAY ET AL. v. SADLER HOMES, INC. (Tenn. Ct. App. June 15, 2012)

Plaintiff-homeowners filed this action for breach of contract, breach of warranty, and violations of the Tennessee Consumer Protection Act against the builder and seller of their home alleging that the home was not constructed in a workmanlike manner.

Following a bench trial, the trial court found that the defendant breached the contract and the express and implied warranties, and violated the TCPA. The court awarded damages of $90,000 for the diminution in value of the home. The court also held Plaintiffs were entitled to recover their attorney’s fees pursuant to the TCPA.

Defendant appealed arguing that Plaintiffs failed to prove causation, that the trial court erred in awarding damages in the amount of $90,000 for the diminution in value of the home, and erred in finding it violated the TCPA for which the trial court awarded attorney’s fees. We affirm the trial court’s findings as to Plaintiffs’ claims for breach of contract and breach of warranty and affirm the trial court’s determinations as to damages; however, we find the evidence preponderates against the finding of a violation of the TCPA and therefore the trial court erred by awarding Plaintiffs their attorney’s fees.

Opinion available at:
https://www.tba.org/sites/default/files/rayd_061512.pdf

Court reviews a case about a home remodeling involving breach of contract and TN Consumer Protection Act claims

CASE HANDYMAN SERVICE OF TENNESSEE, LLC v. HELEN MARIE HARBEN LEE (Tenn. Ct. App. June 15, 2012)

Homeowner retained Contractor to remodel her residence and paid Contractor two out of three installments as provided in the contract. Homeowner was not satisfied with Contractor’s work and refused to pay the final installment.

Contractor sued for breach of contract and Homeowner filed a counterclaim asserting Contractor breached the contract by failing to perform the job in a workmanlike and reasonable manner. Homeowner also claimed Contractor violated the Tennessee Consumer Protection Act by engaging in unfair and deceptive practices.

The trial court dismissed Contractor’s complaint and held Contractor breached the contract by failing to perform the work in a reasonable and workmanlike manner. The court found Contractor was not liable for double or treble damages under the Tennessee Consumer Protection Act because Homeowner did not prove its deficiencies were intentional or willful.

Homeowner appealed, claiming the trial court erred in denying her motion to amend her counterclaim to assert a claim for rescission and erred in holding Contractor did not violate the Tennessee Consumer Protection Act. We affirm the trial court’s judgment.

Opinion available at:
https://www.tba.org/sites/default/files/casehandyman_061512.pdf

Court reviews a Tennessee Consumer Protection Act claim and other claims in a case involving accusations of negligent construction

MICHAEL L. JOHNSON, ET AL. v. TODD FORD (Tenn. Ct. App. April 12, 2012)

Michael L. Johnson and Tammy K. Johnson (“Plaintiffs”) purchased from Todd Ford (“Defendant”) real property located in Athens, Tennessee containing a house constructed by Defendant (“the House”). Shortly after purchasing the House, Plaintiffs began to experience problems with a leaking and flooding basement.

Plaintiffs sued Defendant alleging, among other things, breach of contract, negligent construction, misrepresentation, and violations of the Tennessee Consumer Protection Act. Prior to trial, the Trial Court partially granted Plaintiffs’ motion for summary judgment finding that Defendant had violated the Tennessee Consumer Protection Act. The Trial Court held, however, that whether the violation caused damages to Plaintiffs would be submitted to the jury for its determination.

After a jury trial, the Trial Court entered judgment upon the jury’s verdict finding and holding, inter alia, that Defendant breached the parties’ contract, and that Plaintiffs were awarded compensatory damages of $50,000 for the breach. The Trial Court also awarded Plaintiffs their attorney’s fees and discretionary costs.

Plaintiffs appeal to this Court raising issues regarding the jury’s failure to find in Plaintiffs’ favor with regard to the claims of misrepresentation, damages for Defendant’s violation of the Tennessee Consumer Protection Act, punitive damages, and rescission, among other things. We affirm.

Opinion available at:
https://www.tba.org/sites/default/files/johnsonm_041212.pdf

Court reviews a breach of contract and Consumer Protection Act claim against a home builder

ROBERT F. MEREDITH ET AL. v. KENNETH L. WELLER ET AL. (Tenn. Ct. App. January 25, 2012)]

The plaintiff, Robert F. Meredith ("the Owner"), appeals a judgment rendered against him in favor of his home builder, Kenneth L. Weller ("the Builder"), on the Builder's counterclaim for breach of contract and for attorney's fees incurred in defending the Owner's claims for, among other things, defective construction, misrepresentation, breach of contract, and violations of the Tennessee Consumer Protection Act, Tenn. Code Ann. sections 47-18-101 et seq. (2001)("the TCPA"). The Builder asks us to award him his attorney's fees incurred in defending the Owner's appeal. We affirm the judgment of the trial court in all respects. We also award the Builder his reasonable attorney's fees incurred on appeal and remand to the trial court for a hearing to determine those fees.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2012/meredithr_012512.pdf

Court reviews a case involving a breach of implied warranty dispute over unimproved real property

JERRY ANN WINN v. WELCH FARM, LLC, ET AL. (Tenn. Ct. App. September 1, 2011)

The buyer of unimproved real property sued the sellers for breach of implied warranties, imposition of a permanent nuisance, and diminution in value of the property; buyer also sought damages for alleged violations of the Tennessee Real Estate Broker License Act, the duty of good faith and fair dealing, the Tennessee Consumer Protection Act, and negligence.

The trial court held that Tennessee does not provide a cause of action for breach of implied warranty in the sale of unimproved real property; the court also held that buyer had not demonstrated a genuine issue of material fact as to whether the lot was "unbuildable." The court granted summary judgment to the defendants, and the buyer appealed. Buyer asserts that the sellers had a duty to disclose "possible adverse soil conditions." She also urges this Court to adopt a cause of action for breach of implied warranty of suitability for residential construction. We affirm the judgment of the trial court.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2011/winnj_090111.pdf

Court Reviews a Recission of Contract Case Against Builders of a Home

HOSIE JOHNSON ET AL. v. NICK DATTILO ET AL. (Tenn. Ct. App. July 15, 2011)

The purchasers of a lot and newly constructed residence filed this action against the builders, seeking damages and rescission of the construction and sale agreement. The plaintiffs allege the defendants breached the agreement by failing to construct the home in accordance with "good building practices," and breached the implied warranty of workmanship. They also allege that statements made by the foreman during construction, concerning the condition of the property, amount to a violation of the Tennessee Consumer Protection Act, Tenn. Code Ann. section 47-18-104(b)(7), as well as common law negligent and fraudulent misrepresentation. The trial court granted the defendant's motion for a directed verdict on all claims. Finding plaintiffs failed to provide evidence of key elements in each of their claims, we affirm.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2011/johnsonh_071511.pdf

Court Reviews Whether a Contractor Violated the TN Consumer Protection Act by Hiding Unsuitable Soil

SPRING CRESS REALTY, LLC v. LARRY E. BROWN DBA S&B ASSOCIATES ET AL. (Tenn. Ct. App. May 16, 2011)

This is an action by an owner/developer of real property, Spring Cress Realty, LLC, against its excavation contractor, Larry E. Brown dba S&B Associates. The primary factual allegation is that the excavator intentionally hid approximately 40,000 cubic yards of unsuitable soil in an "engineered fill." The complaint included a claim that Brown violated the Tennessee Consumer Protection Act ("the TCPA"), Tenn. Code Ann. section 47-18-101 et seq.(2001). After a bench trial, the court awarded Spring Cress a judgment against Brown for compensatory damages of $551,295, trebled under the TCPA to $1,653,885. Brown appeals raising issues as to the preponderance of the evidence and the statute of limitations applicable to the TCPA claim. We affirm.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2011/springcress_051611.pdf

Court Reviews whether Defendant Violated the Consumer Protection Act in a Cases Involving the Construction of a Home

ROBERT SHROUT, et al., v. HALL CONSTRUCTION, et al. (Tenn. Ct. App. March 14, 2011)

This case arose over the construction of a home for plaintiffs. Plaintiffs sued the construction company and a bank and several individuals. The Trial Court resolved the issues as to defendants, except Mark Rodriguez, prior to trial. The plaintiffs' case against Rodriguez was tried by the Trial Court who directed a verdict at the end of plaintiffs' proof. Plaintiffs appealed to this Court.

Plaintiffs insisted that material evidence established a violation of the Consumer Protection Act by defendant, and the directed verdict should be reversed. Upon review of the evidentiary record, we conclude that the Trial Judge properly directed a verdict in favor of the defendant, and we affirm the Trial Court's Judgment.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2011/shroutr_031411.pdf

Court Reviews a Case Involving a Non-Performing Construction Company, a Developer, and Homeowners

DANIEL CAVANAUGH, et al., v. AVALON GOLF PROPERTIES, LLC. (Tenn. Ct. App. February 24, 2011)

Plaintiffs purchased a residential lot from defendant developer, but the purchase contract required plaintiffs to use defendant construction company to build their home. Before the home was completed, defendant construction company defaulted on paying materialmen and suppliers and abandoned the project.

Plaintiffs brought this action alleging that developer knew, or should have know, that the construction company was incapable of performing the required construction services, and that the developer owed plaintiff a fiduciary duty to provide a contractor who could perform the work in a good, workmanlike manner. They further alleged a breach of contract, in violation of the Tennessee Consumer Protection Act.

A default judgment was entered against the construction company, and the developer filed a Motion for Summary Judgment which the Trial Court ultimately granted against plaintiffs. Plaintiffs appealed and we affirm the Judgment of the Trial Court.

Opinion available here:
http://www.tba2.org/tba_files/TCA/2011/cavanaugh_022411.pdf

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:
http://www.tba2.org/tba_files/TSC/2010/davisj_102610.pdf

KOCH and CLARK, dissenting:
http://www.tba2.org/tba_files/TSC/2010/davisj_DIS_102610.pdf

Court reviews whether trial court properly awarded damages pursuant to the TN Consumer Protection Act

SCOTT CAMPBELL, ET AL. v. WILLIAM H. TEAGUE, ET AL. (Tenn. Ct. App. March 31, 2010)

This is a construction case. Appellants/Builders appeal the trial court's award of damages to Appellees/Homeowners pursuant to the Tennessee Consumer Protection Act, and arising from Appellants/Builders' breach of warranty and contract. Discerning no error, we affirm.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2010/campbells_033110.pdf

Case replete with tenets of construction law

CATHERINE SMITH BOWLING, ET AL. V. TODD JONES, ET AL. (Tenn.Ct.App. May 16, 2008).

Plaintiff homeowners sued defendant residential building contractors for breach of a home construction contract upon allegations of defective workmanship and abandonment of contract. The trial court entered judgment in favor of plaintiffs and awarded actual damages in an amount based upon the finding that the house was of no value. The trial court also awarded damages under the Tennessee Consumer Protection Act upon a finding that the defendants violated the Act by willfully and knowingly misrepresenting that they were bonded. Upon appeal, we find no error in the judgment of the trial court, and accordingly, the judgment is affirmed in all respects.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2008/bowlingc_051608.pdf

IMPLIED WARRANTY TO BUILD NEW HOME IN A WORKMANLIKE MANNER:
"A contract to construct an entire building is essentially a contract for material and labor, and includes an implied warranty protecting the owner from defective construction. Once a builder undertakes a construction contract, the common law imposes upon him or her a duty to perform the work in a workmanlike manner, and there is an implied agreement that the building or work performed will be sufficient for the particular purpose desired or to accomplish a certain result. Thus, a failure to perform a building contract in a workmanlike manner constitutes a breach of the contract." Id. (citing 13 AM. JUR. 2d Building and Construction Contracts §10 (2000)).

ABANDONMENT = BREACH OF CONTRACT; CONTRACTOR BREACHES BY REFUSING TO PERFORM WORK; OWNER BREACHES BY REFUSING TO PAY:
"The abandonment of a contract gives rise to a cause of action for breach. [] In the instant matter, each party contends that the other abandoned the contract; the Andersons argue that the Jones brothers simply left the job and quit performing their duties under the contract, while the Jones brothers argue that the only reasons they did not complete their contractual duties were that the Andersons abandoned the contract first, by failing to continue to pay draws and purchase building materials and later, by firing them." Id. (citation omitted).

DELEGATION TO INDEPENDENT CONTRACTORS DOES NOT ABSOLVE A CONTRACTOR OF ITS DUTIES TO THE HOMEOWNER:
"[T]he Jones brothers [contend that the subcontractors were independent contractors] and therefore [they] were not ordinarily liable for the negligence of an independent contractor.” ... We find no merit in this argument. The Jones brothers had a contractual duty to construct the house to completion and to perform the construction in a workmanlike manner. Their unilateral delegation of work to third parties did not absolve them of this duty." Id.

NEW HOME CONSTRUCTION WITH SEVER STRUCTURAL DEFECTS IS HELD TO HAVE ZERO VALUE (i.e., $0):
"It is well settled that an owner of property is competent to testify to the value of such property. [] Given the above referenced testimony of the owners and other evidence confirming the house’s structural instability, we believe the trial court’s determination that the house is of zero value is well supported, and we do not find that the evidence preponderates otherwise." Id. (citation omitted).

CONTRACTOR VIOLATED TCPA BY FALSELY REPRESENTING THAT THEY ARE BONDED; IF CONTRACTOR'S BUSINESS CARD SAYS "BONDED" AND CONTRACTOR IS NOT, THEY MUST APPRISE THE OWNER:
"The Jones brothers contend that insufficient evidence was presented to support the trial court’s finding that their violation of the TCPA was willful and knowing. They do not deny that they were not bonded, nor do they deny that they misrepresented to the Andersons that they were bonded and that the Andersons relied upon this misrepresentation. However, the Jones brothers insist that such misrepresentation was unintentional and that the record does not show otherwise. We disagree. First, we note Jerry Jones’s own testimony that prior to their employment by the Andersons, he gave Kimberly Anderson the Jones brothers’ business card, a copy of which is in the record before us. Among other things, this card states that the Jones brothers are “Licensed, Insured, and Bonded.”" Id.