March 26, 2009

Suit for negligent misrepresentation held to be construction defect case; barred by stature of repose; wrongful concealment fails


Ron Henry and Linda Henry (“Plaintiffs”) sued Cherokee Construction and Supply Company, Inc. (“Defendant”) alleging damages sustained when a wall in the home that Defendant constructed for Plaintiffs collapsed. Defendant filed a motion for summary judgment. The Trial Court entered an order finding and holding that Plaintiffs’ claim was barred by the four year statute of repose contained in Tenn. Code Ann. section 28-3-201, et seq., and granting Defendant summary judgment. Plaintiffs appeal to this Court. We affirm.

Opinion may be found at the TBA website:

“Plaintiffs argue that they have not sued for damages resulting from a construction defect but instead have sued for “a negligent misrepresentation of completeness and Notice of Completion....” Plaintiffs argue that their claim is based upon the Notice of Completion being negligently filed because Defendant had not actually completed the construction as required by the agreement between the parties.” Id.

“After a careful and thorough review of the record on appeal, we conclude that regardless of how Plaintiffs’ claim is couched, the case at hand is an action “to recover damages for any deficiency in the design, planning, supervision, observation of construction, or construction of an improvement to real property, for injury to property, real or personal, arising out of any such deficiency….” Tenn. Code Ann. § 28-3-202 (2000). The material substantive allegations of Plaintiffs’ complaint relate to Defendant’s alleged negligence in the construction of the house. As such, the Trial Court did not err in applying Tenn. Code Ann. 28-3-202.” Id.

“By its plain and unambiguous language, Tenn. Code Ann. § 28-3-205(b) provides that the statute of repose will not be available “to any person who shall wrongfully conceal any such cause of action.” However, Plaintiffs’ claim with regard to this issue is predicated upon the assertion that Defendant wrongfully concealed construction defects and the fact that the job was not finished according to the contract. As this Court stated in Register v. Goad: “The concealment referred to in the statute is not concealment in the original construction, but rather a concealment by defendant of plaintiff’s cause of action once it arises.” Plaintiffs make no allegation that Defendant did anything to conceal the cause of action once it arose. Rather, the “concealment” complained of by Plaintiffs occurred in the original construction itself. As such, Plaintiffs’ claim for wrongful concealment fails.” Id.

March 19, 2009

Worker willfully disregarded instructions and was injured; thus, his workers' comp. claim was denied

CIVIL CONSTRUCTORS, INC., ET AL. v. GEORGE HAYNES, III (Tenn. Workers’ Comp. Panel, March 19, 2009)

This workers’ compensation appeal has been referred to the Special Workers’ Compensation Appeals Panel of the Supreme Court in accordance with Tennessee Code Annotated section 50-6-225(e)(3) for a hearing and a report of findings of fact and conclusions of law. Employee was injured on the job, when the dump truck he was driving overturned. Employer denied liability, asserting that the injuries were the direct result of willful misconduct by Employee. The trial court found in favor of Employer on that issue, and denied benefits. Employee has appealed, contending that the evidence preponderates against the trial court’s finding. We affirm the judgment.

Opinion may be found at the TBA website:

“Extending deference to the trial court’s implicit finding concerning Employee’s credibility, we conclude that the evidence in this record shows that Employee had an accident on June 5 as a result of driving his truck on the berm; that he was told thereafter by two of his supervisors not to drive his truck on the berm; that he was given the same instruction again on June 16, accompanied by a reference to endangering his job; that he was also warned by a co- worker on the same date that it was unsafe to drive the truck onto the berm; and that Employee disregarded those instructions and warnings, resulting in an accident which caused his injuries.” Id.

March 16, 2009

Court examines implied contracts, quantum meruit, promisory estoppel; good faith not actionable; construction site may not be proper venue


The Plaintiff, Hermosa Holdings, Inc., instituted the case at bar against several Defendants by asserting various causes of action with reference to a proposed medical office building development. All Defendants responded to the original complaint by filing motions to dismiss pursuant to Tenn.R.Civ.P. 12.02(6) and for improper venue. The Plaintiff subsequently filed an amended complaint. The Defendants responded by filing additional motions to dismiss. By Order entered February 14, 2008, the Chancery Court of Davidson County granted the Defendant’ motions and dismissed the amended complaint with prejudice. We affirm in part, vacate in part and remand for further proceedings.

Opinion can be found at the TBA website:

Bank payment to joint venture is sufficient payment to either party in venture; Bank not negligent, unjustly enriched or fraudulent in paying just one

WADE LEE PHELPS v. BANK OF AMERICA (Tenn. Ct. App. March 16,2009).

Plaintiff appeals from the grant of summary judgment in a negligence and breach of contract action against bank which had closed loan and delivered loan proceeds to contractor. An agreement between contractor and third party providing financing for construction project stated that contractor and third party would be paid out of loan proceeds. Contractor failed to pay third party in accordance with their agreement. Trial court granted summary judgment to bank, holding that there was a joint venture between contractor and third party and that Bank’s delivery of loan proceeds to contractor was payment to joint venture. Court also held that finding of joint venture pretermitted negligence and breach of contract claims against bank. Finding no error, we affirm the judgment of the trial court.

Opinion may be found at the TBA website:

“The proof submitted by Mr. Phelps in his response was insufficient to negate BOA’s contention that Mr. Church and Mr. Phelps were joint venturers and, in fact, buttressed this conclusion and more clearly establishes the necessary elements of common purpose and agreement. Contrary to the contention of Mr. Phelps, the fact that the parties had different responsibilities does not detract from a finding that they had an equal right of control; rather, the action of the parties in dividing the responsibilities of constructing and financing the duplex is evidence that each had an equal right to control the venture, exercised that control for the benefit of the enterprise and agreed to the division of responsibilities. The trial court did not err in finding that Mr. Church and Mr. Phelps were engaged in a joint venture.” Id.

“In support of his contention that BOA owed him a duty and violated that duty, Mr. Phelps relies upon the statements of Mr. Howell, representative of BOA, that he would be paid at closing and that Mr. Howell would have the agreement between Mr. Angus, Mr. Phelps and Mr. Church sent to the closing agent. BOA correctly points out that the Statute of Frauds contained at Tenn. Code Ann. § 29-2-101(b)(1) precludes any claim against BOA relative to the loan to Mr. Angus not based on an instrument signed by BOA. The representations of Mr. Howell, consequently, cannot establish a duty on the part of BOA that would sustain a cause of action for breach of that duty in the absence of a writing. Moreover, any claim of negligence against BOA by Mr. Phelps would fail because of the uncontroverted proof that the cause in fact and proximate cause of Mr. Phelps’ failure to be paid was the action of Mr. Church in not paying him.” Id.

“Both Mr. Phelps and BOA acknowledge that, in order to establish a claim of unjust enrichment, Mr. Phelps must show: (1) a benefit was conferred on BOA; (2) that BOA appreciated the benefit; and (3) it would be unjust for BOA to retain the benefit without providing compensation for it. Of these requirements, the most significant is that the enrichment be unjust. Paschall’s, Inc., 407 S.W.2d at 155. The only benefit BOA received as a result of the transaction between Mr. Church, Mr. Phelps and Mr. Angus was any profit it received as a result of the loan made to Mr. Angus. At the time the loan was made, the duplex had been substantially completed and the property appraised at an amount sufficient to satisfy the BOA’s loan requirements. BOA had no interest in the property and, consequently, had no interest to be enriched prior to construction of the duplex; after construction, the sole interest it had in the property was to secure the indebtedness.” Id.

March 13, 2009

General Contractor and sub-contractor both found to be in breach of contract; each party assessed one-half of repair costs to damaged roof


In this action plaintiff sued for money owed under its subcontract with the defendant contractor. The defendants’ contractor denied liability, raised as affirmative defenses, waiver/estoppel, unclean hands and breach of contract, filed a counter-claim alleging that plaintiff failed to complete its work in a timely and proper manner and permitted the roof to be harmed by others during the construction and generally failed to cooperate. Following an evidentiary hearing, the Trial Judge determined that both parties had breached the contract, that plaintiff was guilty of unclean hands, denied both parties any recovery and dismissed the case. On appeal, we affirm.

Opinion may be found at the TBA website:

“As to the damage to the roof, the testimony showed that everyone involved bore some responsibility, which the Trial Court found. The Trial Court relied upon this fact in basically holding that the most equitable resolution in this situation was to leave the parties where they were, because each party had liability and responsibility for the damage, as mistakes were made by both parties.” Id.

"Defendants argue the Trial Court erred in failing to award them any attorney’s fees in this case, because plaintiff was shown to have breached the contract, to have unclean hands, etc. What the Trial Court found, however, was that both parties breached their agreement, and thus concluded that both parties should be left where they are. It appears that, based upon the evidence in this case, this was the most equitable resolution where it was shown that both parties bore responsibility for the problems leading up to the lawsuit, and both parties were technically in breach. The proof showed that the contractor directed the work on the roof to begin too early in construction, and the contractor also bore responsibility for failing to protect the roof.” Id.