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
Showing posts with label appraisal. Show all posts
Showing posts with label appraisal. Show all posts
October 26, 2010
September 11, 2008
Allegedy inflated appraisal made prior to construction of new home cannot support a fraudulent misrepresentation claim; Court endorses "cost approach"
JOSEPH AND KIMBERLI DAVIS v. PATRICK J. MCGUIGAN, ET AL. (Tenn.Ct.App. September 11, 2008).
Homeowners filed suit against Appraiser for intentional and negligent misrepresentation and violation of the Tennessee Consumer Protection Act. Appraiser moved for summary judgment on all claims. The trial court denied Appraiser's motion on the negligent misrepresentation claim, but dismissed the intentional misrepresentation claim and the Tennessee Consumer Act claim. During the course of the proceedings, the trial court also excluded certain witnesses who were tendered as experts. Both parties appeal. We affirm the trial court's grant of summary judgment on both claims, and decline to address the remaining issues for lack of justiciability.
Opinion may be found at the TBA website:
http://www.tba2.org/tba_files/TCA/2008/davisj_091108.pdf
"The Appraiser contends that the appraisal is an estimation or opinion, and is not a representation of an existing or past fact. Therefore, the Appraiser argues, an essential element of the Homeowners’ claim for intentional misrepresentation is conclusively negated and summary judgment was proper on this claim. Homeowners argue that the appraisal value was not the opinion of the Appraiser, but rather an opinion he gave which the Appraiser did not have or knew to be false. Although Homeowners’ argument applies to the fourth element for fraudulent misrepresentation, their contention does not change the requirement of the first element - that the defendant make a representation of an existing or past fact. In Tennessee, appraisals are not considered facts, but rather estimates or opinions." Id.
"Further, we note that when the Appraiser conducted the Appraisal, he was appraising a home that had not yet been constructed. The Appraiser used the “cost approach” analysis, and referred to, among other resources, the specifications and building plans provided by the Homeowners. At that point, the Appraiser only had plans for the future Home on which to base his appraisal; he could not verify that the materials planned for in the Home were actually used in the construction or examine the workmanship of the construction. In Tennessee, conjecture or representations concerning future events are not actionable even though they may later prove to be false." Id. (citations omitted).
Homeowners filed suit against Appraiser for intentional and negligent misrepresentation and violation of the Tennessee Consumer Protection Act. Appraiser moved for summary judgment on all claims. The trial court denied Appraiser's motion on the negligent misrepresentation claim, but dismissed the intentional misrepresentation claim and the Tennessee Consumer Act claim. During the course of the proceedings, the trial court also excluded certain witnesses who were tendered as experts. Both parties appeal. We affirm the trial court's grant of summary judgment on both claims, and decline to address the remaining issues for lack of justiciability.
Opinion may be found at the TBA website:
http://www.tba2.org/tba_files/TCA/2008/davisj_091108.pdf
"The Appraiser contends that the appraisal is an estimation or opinion, and is not a representation of an existing or past fact. Therefore, the Appraiser argues, an essential element of the Homeowners’ claim for intentional misrepresentation is conclusively negated and summary judgment was proper on this claim. Homeowners argue that the appraisal value was not the opinion of the Appraiser, but rather an opinion he gave which the Appraiser did not have or knew to be false. Although Homeowners’ argument applies to the fourth element for fraudulent misrepresentation, their contention does not change the requirement of the first element - that the defendant make a representation of an existing or past fact. In Tennessee, appraisals are not considered facts, but rather estimates or opinions." Id.
"Further, we note that when the Appraiser conducted the Appraisal, he was appraising a home that had not yet been constructed. The Appraiser used the “cost approach” analysis, and referred to, among other resources, the specifications and building plans provided by the Homeowners. At that point, the Appraiser only had plans for the future Home on which to base his appraisal; he could not verify that the materials planned for in the Home were actually used in the construction or examine the workmanship of the construction. In Tennessee, conjecture or representations concerning future events are not actionable even though they may later prove to be false." Id. (citations omitted).
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