IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE

October 13, 2010 Session

THOMAS E. MOORHEAD ET AL. v. JOY VAIL ALLMAN ET AL.

Appeal from the Chancery Court for Bedford County

No. 25,255 J. B. Cox, Chancellor

No. M2009-01822-COA-R3-CV - Filed February 24, 2011

The sellers of a mobile home park appeal the trial court’s decision to rescind two real estate

sales contracts and refund the purchaserstheir down payment. The purchasers asserted claims

for fraudulent misrepresentation, fraud in the inducement, and breach of fiduciary duty, all

of which arose from alleged misrepresentations by the sellers regarding the condition and

income potential of the property at issue. Following a lengthy and convoluted procedural

history, including a jury trial, the granting of a new trial, and several waves of amended

pleadings, the parties filed competing motions for summary judgment. The sellers asserted

various defenses including, inter alia, that the purchasers’ claims were time barred. Finding

that the sellers fraudulently induced the purchasers into buying the property, and that the

statute of limitations had been tolled due to the sellers’ concealment of material facts, the

trial court denied the sellers’ motion, granted summary judgment to the purchasers. For relief,

the trial court rescinded the sales contracts and awarded the purchasers a refund of their

down payments. We affirm.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed

FRANK G. CLEMENT, JR., J., delivered the opinion of the Court, in which PATRICIA J.

COTTRELL, P.J., M.S., and RICHARD H. DINKINS, J., joined.

John H. Norton, III, and Liberti A. Snider, Shelbyville, Tennessee, for the appellants, Joy

Vail Allman and Larry Allman.

Terry A. Fann, Murfreesboro, Tennessee, for the appellees, Clyde D. Manis, and Gregory D.

Johns.
OPINION

On January 28, 1997, appellees Clyde D. Manis and Gregory D. Johns (“Manis &

Johns”), entered into a contract with appellants Joy Vail Allman and Larry Allman (“the

Allmans”) to purchase 40.3 acres, which included a mobile home park on Highway 231 in

Bedford County, Tennessee. At the time of the sale, the Allmans had owned the mobile home

park, known as Willow Tree Farm, for eight years. The purchase price for the land and

mobile home park was $751,500.00, of which the buyers were to make a specified cash down

payment at closing with the balance to be financed by the sellers at 8% for 20 years. On

February 6, 1997, Manis and Johns entered into a second contract with the Allmans to

purchase an adjoining tract of 38 acres, which included three additional trailers, a store

building, a block building, and a small trailer, for a purchase price of $190,000.00. For this

second tract, the buyers were to make an additional down payment at closing with the

balance to be financed by the sellers at 7% interest for 20 years.

The closing for the sale of both properties occurred on March 1, 1997, at which time

Manis & Johns made a cash down payment of $147,275.00 and executed promissory notes

and deeds of trust in favor of the Allmans for the balance of the purchase price on the two

tracts.

Manis & Johns operated the mobile home park for eight months, from March 1997

until November 1997. In November of 1997, due to various difficulties with the business, the

parties agreed that the Allmans would resume the responsibility for the daily operation of the

mobile home park until Manis & Johns could sell the business and real estate. Thus, the

Allmans resumed the duties of performing maintenance and dealing with current tenants as

well as showing homes to prospective tenants and signing new leases. They also assisted

Manis & Johns in finding a buyer.

In early 1998, Thomas E. and Robert S. Moorhead (“the Moorheads”) expressed an

interested in purchasing the mobile home park. In March, Robert Moorhead visited the

property and walked through several of the rental units with Ms. Allman. Ms. Allman

informed Mr. Moorhead that the property was well-maintained, and that the units were in

good working order and occupied by good tenants. Ms. Allman also provided the Moorheads

with a statement estimating $7,000.00 in annual maintenance costs and $120,000.00 in

annual income.

On April 8, 1998, the Moorheads purchased the mobile home park and the 40-acre

tract (but not the 38-acre tract) from Manis & Johns for $775,000.00. The Moorheads made

a $100,000.00 cash payment on the property at the closing. Although Manis & Johns were

the sellers of the property and were in attendance at the closing, Ms. Allman retained the

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funds paid at closing. By separate agreement between Manis & Johns and the Allmans,

Manis & Johns also quitclaimed the 38-acre tract back to the Allmans for no consideration

other than forgiveness of the balance of the debt Manis & Johns purportedly owed the

Allmans on the promissory notes. Although the $100,000.00 down payment from the

Moorheads was to be paid to Manis & Johns, Ms. Allman retained all but $15,000.00,

claiming that Manis & Johns owed the balance to them for various expenses.

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The Moorheads managed the mobile home park themselves and soon faced substantial

financial and maintenance problems with the mobile home park similar to those experienced

by Manis & Johns. Within a month of running the park, the water pipes in many of the

mobile homes began to break. After aboutsix months, the Moorheads had to repair or replace

water pipes in all 16 units. In total, they documented more than fifty water line breaks. In

many of the units, the leaks caused extensive damage to the floors and walls.

On August 1, 2000, the Moorheads filed suit, naming the Allmans and Manis & Johns

as defendants. They sought rescission of their contract to purchase the mobile home park and

40-acre tract and a refund of their $100,000.00 down payment. They alleged, inter alia,

material misrepresentations by Joy Allman in the inducement of the contract as to the quality

and profitability of the mobile home park and violations of the Tennessee Consumer

Protection Act. Manis & Johns were named as defendants based on their privity with the

Moorheads in the chain of title. The Moorheads asserted no additional substantive claims

against Manis & Johns.

The case was set to be tried starting May 1, 2002. Two weeks prior to trial, on April

16, 2002, Manis & Johns filed a cross-claim against the Allmans also seeking rescission of

their contracts with the Allmans and a refund of their down payments. However, upon motion

by the Allmans to strike, the trial court dismissed the cross-claim on the ground it would

work an undue hardship on the Allmans because it was filed too close to the date of trial. The

interlocutory order, which was entered on May 3, 2002, stated that the dismissal was “with

prejudice.” Manis & Johns filed a notice of appeal of the order of dismissal on June 7, 2002.

The case was tried by a jury on May 1-2, 2002. At the conclusion of the trial, the jury

found the Allmans made material misrepresentations to the Moorheads to induce them into

purchasing the mobile home park and property. The jury also found that all of the contracts

should be rescinded, and awarded a judgment of $60,000 in favor of the Moorheads against

the Allmans. The Chancellor entered the judgment on May 10, 2002.

Circumstances pertaining to the $100,000.00 will be discussed in more detail later in this opinion. 1

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Shortly thereafter, the Allmans filed a motion for a new trial on various grounds,

including that the remedy of rescission should have been decided by the trial judge and not

submitted to the jury. The trial court agreed and granted the motion for a new trial. With

respect to Manis & Johns, the court also reversed its prior dismissal of their cross-claim, and

stated that they would be allowed to re-file it against the Allmans in the new trial.

As authorized by the trial court, Manis & Johns promptly re-filed their cross-claim

against the Allmans. Moreover, as a consequence of being permitted to re-file their crossclaim, they filed a motion with this court to voluntarily dismiss their appeal of the original

dismissal of their cross-claim. The motion was granted by this court on March 11, 2003, and

the appeal was dismissed.

Not long after re-filing, Manis & Johns and the Moorheads each voluntarily dismissed

their respective complaints, pursuant to Rule 41 of the Tennessee Rules of Civil Procedure,

so that they could jointly file, as co-plaintiffs, an amended complaint against the Allmans.

The respective orders of dismissal for each of the parties were entered June 24 and 27, 2003.

On June 23, 2004, the Moorheads, along with Manis & Johns (hereinafter the “coplaintiffs”), jointly filed an amended complaint. The substance of the claims asserted by the

four co-plaintiffs was the same as in the prior complaint and cross-claim: they jointly alleged

misrepresentation and fraud in the inducement of the sales contracts by the Allmans as to all

four plaintiffs, and breach of fiduciary duty by the Allmans as to Manis & Johns only. The

breach of fiduciary duty claims concerned the Allmans’ management of the income of the

mobile home park as well as the Allmans’ withholding of all but $15,000.00 of the

$100,000.00 down payment made by the Moorheads, which was owed to Manis & Johns.

In their answer, the Allmans denied that the co-plaintiffs were entitled to any relief

and asserted comparative fault as an affirmative defense. They later filed an amended answer

arguing that the co-plaintiffs’ claims were barred by the applicable statute of limitations.

Subsequently, both sides filed motions for summary judgment. The co-plaintiffs

argued that, based on admissions made by the Allmans in pleadings, depositions and during

the previous trial, there was no material dispute as to whether the Allmans had fraudulently

misrepresented the profitability and quality of the mobile home to all four co-plaintiffs,

which had induced each of the co-plaintiffs to purchase the mobile home park and property.

In their opposing motion for summary judgment, the Allmans asserted that the applicable

statutes of limitation barred the co-plaintiffs’ claims and that the trial court erred in allowing

Manis & Johns to re-file their cross-claim, which had been dismissed “with prejudice.”

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After several continuances and a lengthy delay, the cross motions were heard on

January 28, 2009. The Chancellor denied the Allmans’ motion in all respects and granted

summary judgment to the co-plaintiffs. The trial court found it did not err in allowing Manis

& Johns to re-file their previously dismissed cross-claim for two reasons: 1) the cross-claim

was dismissed only because it was filed too close to the date of the first trial in May of 2002,

which was no longer an issue; and 2) the order dismissing the cross-claim was an

interlocutory order, not a final judgment, because the order did not resolve all the claims at

issue in the action, and it did not comply with Tenn. R. Civ. Pro. 54.02. As for the statute of

limitations defense, the court held the statute had been tolled by the Allmans’ ongoing acts

of deception, many of which were not revealed until testimony was given in the jury trial in

May of 2002. The court stated:

But for [the Allmans’] withholding information and hiding information and

making material fraudulent misrepresentations to the parties as to the contracts

and what was to occur concerning the return of Manis and Johns’ money, the

Plaintiffs Manis and Johns would have been in a better position to stop the

closing with the Moorheads or to bring their own action.

With respect to the co-plaintiffs’ motion for summary judgment, the trial court stated,

“[I]t is clear that there were material misrepresentations made [by the Allmans] to Manis and

Johns to induce them into the initial purchase. It is clear that the [Allmans] took on an agency

relationship in ‘managing’ the mobile home park and fraudulently induced [the] Moorheads

into purchasing the property.” Specifically, the trial court found that the Allmans

misrepresented the amount of maintenance the mobile homes required and failed to disclose

that the mobile homes were outfitted with polybutylene piping, a type of piping which the

Allmans were aware was subject to a major class-action lawsuit at the time of both sales. The

court also found that the Allmans breached their fiduciary duty to Manis & Johns while

managing the park for Manis & Johns by failing to provide any accounting for income and

expenses, failing to report a higher offer to purchase the property, and by retaining the down

payment paid by the Moorheads.

The trial court entered judgment in favor of the Moorheads and Manis & Johns on

July 31, 2009, rescinding all of the contracts at issue and restoring title to the property in the

Allmans. The trial court ordered the Allmans to return the Moorheads’ $100,000.00 down

payment with prejudgment interest over 11 years, for a total of $210,000.00. As for the

claims of Manis & Johns, the trial court ordered the Allmans to refund their down payments

of $147,075.00, with prejudgment interest over 12 years, for a total of $323,565.00.

The Allmans filed a timely appeal. During the pendency of the appeal, the Allmans

reached a settlement agreement with the Moorheads. Therefore, this appeal only concerns

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the issues between the Allmans and Manis & Johns.

ISSUES

The Allmans do not challenge the trial court’s finding that they fraudulently induced

Manis & Johns into purchasing the mobile home park and adjoining property or that they

breached their fiduciary duty to Manis & Johns while managing the park and facilitating the

sale to the Moorheads. Because the Allmans do not challenge the trial court’s finding that

they acted fraudulently and breached their fiduciary duty, we need not consider the specific

facts upon which these findings are based.

The three issues presented on appeal are that: 1) the claims asserted by Manis & Johns

were barred by Tenn. Code Ann. § 28-3-105, the three-year statute of limitations for claims

of damage to property, 2) the trial court erred by allowing Manis & Johns to re-file their

cross-claim after the cross-claim was dismissed “with prejudice,” and 3) the court erred by

awarding damages to Manis & Johns without holding a hearing on the issue of comparative

fault. The material facts pertaining to these issues are not in dispute and the issues present

only questions of law. Therefore, the applicable standard of review is the de novo standard

with no presumption of correctness. Bain v. Wells, 936 S.W.2d 618, 622 (Tenn. 1997).

I.

The Allmans contend the claims of Manis & Johns were time barred because the

cross-claim was not filed until April 16, 2002, more than four years after the contracts

between the Allmans and Manis & Johns were executed in January and February 1997. We

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find this contention without merit for the following reasons.

Manis & Johns first asserted their claims against the Allmans in a cross-claim

following the commencement of this action by the Moorheads. It has long been held in our

jurisdiction that a cross-claim is “not barred by the applicable statute of limitations or any

The Allmans also argue this first cross-claim failed to state a cause of action. We disagree. The

2

cross-claim alleged that the Allmans “misrepresented the circumstances of the closing transaction,” and that

“the net effect of the misrepresentation . . . is that the Allmans have retained over two hundred thousand

dollars ($200,000) in deposits from the Cross-claimants and the Plaintiffs.” For relief, Manis & Johns

requested rescission as well as a refund of “funds lost by them in the transaction with the Allmans.” We note

that Manis & Johns were acting pro se at this point in the proceedings; as such, they are entitled to a liberal

construction of their pleadings, and we will give effect to the substance of their claims rather than the form.

See Discover Bank v. McCullough, No. M2006-01272-COA-R3-CV, 2008 WL 245976, at *3-*4 (Tenn. Ct.

App. Jan. 29, 2008). Accordingly, we find their first pleading was sufficient to assert a claim for fraudulent

inducement, rescission of the contracts and damages.

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statutory limitation of time, however characterized, if it was not barred at the time the claims

asserted in the complaint were interposed.” Tenn. Code Ann. § 28-1-114(a). Therefore, as

Tenn. Code Ann. § 28-1-114(a) directs, the commencement of this action by the Moorheads

on August 1, 2000 stopped the running of any statute of limitations for the filing of a crossclaim by Manis & Johns against the Allmans. With this in mind, we must determine the

length of the limitations period for Manis & Johns’ claims.

The statute of limitations for a given action will be determined “according to the

gravamen of the complaint.” Vance v. Schulder, 547 S.W.2d 927 (Tenn. 1977). In this case,

although Manis & Johns assert several different theories for recovery, the primary thrust of

their claims is that the Allmans fraudulently misrepresented the condition and income

potential of the mobile home park to induce them into purchasing the property in the first

sale, and that the Allmans made further misrepresentations to induce Manis & Johns to sell

a portion of the property to the Moorheads and to quitclaim the remaining property back to

the Allmans. Our Supreme Court has held that “an economic loss sustained by a plaintiff

from fraud or misrepresentation is an ‘injury to personal property’ requiring the application

of the three-year statute of limitations.” Vance v. Schulder, 547 S.W.2d 927, 932 (Tenn.

1997). Additionally, this court has held that “fraud in the inducement of a contract sounds

in tort and is therefore subject to § 28-3-105’s three year limitation period.” Am. Fid. Fire

Ins. v. Tucker, 671 S.W.2d 837, 841 (Tenn. Ct. App. 1983). Therefore, the applicable statute

of limitations is the three year limitation period stated in Tenn. Code Ann. § 28-3-105.

However, pursuant to the “discovery rule,” the running of the statute of limitations

will be tolled until the plaintiff knows, or reasonably should know, that an injury has been

sustained. See Tenn. Code Ann. § 28-3-105; Prescott v. Adams, 627 S.W.2d 134, 138 (Tenn.

Ct. App. 1981) (citing Stone v. Hinds, 541 S.W.2d 598, 599) (Tenn. Ct. App. 1976) (“[I]n

a suit for property damages under T.C.A. § 28-3-105, the cause of action accrues at the time

the injury occurs, or when it is discovered, or when in the exercise of reasonable care and

diligence the injury should have been discovered.”). Therefore, the three year limitation

period did not begin to run until Manis & Johns were aware, or reasonably should have been

aware, of their injuries.

The trial court found that the Allmans made material misrepresentations to Manis &

Johns regarding the maintenance of the park prior to their purchase. Specifically, the court

found that the Allmans were aware that the type of water piping used in the mobile homes

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on Willow Tree Farm had been the subject of a billion-dollar class action lawsuit, Cox v.

Shell Oil, because the type of plastic used, polybutylene, was prone to frequent leaks.

3 4

Nevertheless, the Allmans represented that the rental units were properly equipped and lowmaintenance. The trial court also found that the Allmans concealed much of the damage to

the floors and walls of the rental units caused by the leaking pipes. When Manis & Johns

were unable to realize the profit margins they expected based on the Allmans’

representations, the Allmans claimed that Manis & Johns were simply not managing the park

properly, and agreed to run the park for Manis & Johns until they could sell.

The Allmans continued to keep material matters from Manis & Johns when the

Allmans were operating the park and facilitating the sale to the Moorheads, such that Manis

& Johns remained unaware of the Allmans’ fraud. During this time, the trial court found that

the Allmans represented they were able to quickly bring the park up to full occupancy, and

that they did not experience an unusual amount of water leaks. However, approximately five

months later, at the time of the sale to the Moorheads, the Allmans claimed that Manis &

Johns owed them over $80,000.00 plus the value of the 38-acre tract (which Manis & Johns

were forced to quitclaim back to the Allmans as part of the sale to the Moorheads), for

expenses the Allmans personally incurred while operating the park. Ms. Allman testified that

she had an agreement with Manis & Johns that they would reimburse her and Mr. Allman for

any expenses incurred while the Allmans ran the property. She also stated that she saw Mr.

Johns several times a month. However, at no point during the time that the Allmans were

running the park did Ms. Allman mention to Mr. Johns that she and Mr. Allman were

spending well over $10,000.00 per month on the park, which is especially noteworthy in light

of the trial court’s finding that Ms. Allman represented to the Moorheads they could expect

approximately $7,000.00 in annual maintenance costs.

The Allmans never provided any accounting or itemization for the $80,000.00 (which

they later reduced to $65,000.00); nor did they ever provide an accounting for the rent

payments they accepted on behalf of Manis & Johns. In testimony, Ms. Allman claimed that

a portion of the $80,000.00 was owed to the Allmans from the mortgage on the 38-acre tract,

but she could not explain why Manis & Johns were required to pay the mortgage off on that

property and quitclaim it back to the Allmans.

Cox v. Shell Oil Co., No, 18,844 (Tenn. Ch. Ct. Obion County 1995) and related cases Beeman v. 3

Shell Oil Co., No. 93-047363 (Tex. Dist. Ct. Harris Court Sept. 1993); Spencer v. Shell Oil Co., No-CV-94-

074 (Ala. Cir. Ct. Greene County Nov. 1994). 

Polybutylene has a propensity to degrade when it comes in contact with chlorinated water, causing 4

leaks.

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The trial court held that the initial misrepresentations of the profitability of the mobile

home park, “along with all the other matters concerning the excessive repairs that were

attributable to polybutylene pipe, coupled with the total lack of accounting and explanation

in this matter lead to the inescapable conclusion that the statute of limitations was tolled”

until depositions were taken for the first trial in March 2001.

The Allmans contend that the trial court erred by concluding that Manis & Johns

should not reasonably have been aware of their injuries until March 2001. However, they do

not contend that Manis & Johns should have been aware of the injury at the time of the

closing of the sale to Manis & Johns on March 1, 1997, or that the problems with the

property, which had been concealed by the Allmans,should reasonably have been discovered

by Manis & Johns while Manis & Johns managed the property themselves, or while the

Allmans managed the property as the agents of Manis & Johns. The Allmans assert that the

earliest Manis & Johns should reasonably have been aware they had been defrauded was at

the time of the sale to the Moorheads, on April 8, 1998, at which time they discovered the

Allmans’ intention to retain the bulk of the $100,000.00 down payment made by the

Moorheads.

It is not necessary for us to determine the date the discovery rule ceased to toll the

statute of limitations for Manis & Johns’ claims, because, even if we consider April 8, 1998,

the date most favorable to the Allmans, as the date Manis & Johns should reasonably have

discovered their injuries, and apply the foregoing principles of law, we find that the claims

asserted by Manis & Johns are not barred by the statute of limitations. If the limitations

period did not begin to run until April 8, 1998 (due to the discovery rule), and it stopped

running with the filing of the Moorhead complaint on August 1, 2000 (due to Tenn. Code

Ann. § 28-1-114(a)), then it is clear that Manis & Johns’ cross-claim was filed within the

three-year limitations period set forth in Tenn. Code Ann. § 28-3-105, with eight months to

spare. Therefore, we affirm the trial court on this issue.

5

II.

For their next issue, the Allmans contend the trial court did not have jurisdiction to

allow Manis & Johns to re-file their cross-claim after the cross-claim had been dismissed

The amended pleadings filed by Manis & Johns after the Allmans were granted a new trial “relate

5

back to the date of the original pleading,” because the claims “arose out of the conduct, transaction, or

occurrence set forth or attempted to be set forth in the original pleading” Tenn. R. Civ. Pro. 15.03, and were

filed with leave of court. Tenn. R. Civ. Pro. 15.01. Furthermore, as stated, Manis & Johns’ claims were

properly re-filed within the one year savings statute, Tenn. Code Ann. § 28-1-105, following their voluntary

dismissal. See Tenn. Code Ann. § 28-1-114(b).

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“with prejudice” prior to the jury trial.

The order dismissing the cross-claim by Manis & Johns states in pertinent part:

[T]he Court finds that the Cross-Claim of Defendants Clyde D. Manis and

Gregory D. Johns was untimely filed, to wit: It was filed on April 16, 2002 for

a trial set for May 1, 2002, which the Court finds is too close to trial and works

an undue hardship upon Defendants Joy Vail Allman and Larry Allman.

Wherefore, it is Ordered that said Cross-Claim be, and it hereby is, dismissed

with prejudice.

The order dismissing the cross-claim asserted by Manis & Johns did not adjudicate

all claims asserted by all parties; particularly it did not adjudicate the Moorheads’ claims.

With regard to dismissals of fewer than all the claims in an given action, Rule 54.02 of the

Tennessee Rules of Civil Procedure provides:

When more than one claim for relief is present in an action, whether as a

claim, counterclaim, cross-claim, or third party claim, or when multiple parties

are involved, the Court . . . may direct the entry of a final judgment as to one

or more but fewer than all of the claims or parties only upon an express

determination that there is no just reason for delay and upon an express

direction for the entry of judgment. In the absence of such determination and

direction, any order or other form of decision, however designated, that

adjudicates fewer than all the claims or rights and liabilities of fewer than all

the parties shall not terminate the action as to any of the claims or parties, and

the order or other form of decision is subject to revision at any time before the

entry of judgment adjudicating all the claims and the rights and liabilities of

the parties.

Tenn. R. Civ. Pro. 54.02 (emphasis added).

The order dismissing the cross-claim by Manis & Johns did not adjudicate the

Moorheads’ claims and it did not contain an “express determination that there is no just

reason for delay” or “an express direction for the entry of judgment.” Therefore, as Rule

54.02 expressly provides, the order of dismissal did not “terminate the action as to any of the

claims or parties.” Id. (emphasis added). Accordingly, it was an interlocutory order that was

“subject to revision at any time before the entry of judgment adjudicating all the claims and

the rights and liabilities of the parties.” See Tenn. R. Civ. P. 54.02; see also In re Estate of

Henderson, 121 S.W.3d 643, 645-46 (Tenn. 2003). For the foregoing reasons, we find the

trial court retained jurisdiction to revise the order dismissing the cross-claim.

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Two weeks after the entry of the order dismissing the cross-claim of Manis & Johns,

the case was tried by a jury and the jury returned a verdict in favor of the Moorheads against

the Allmans. After the judgment was entered and before it became a final judgment, the

Allmans moved for and were granted a new trial pursuant to Tenn. R. Civ. P. 59.07. The

order granting a new trial states: “the Court finds that it should grant a new trial as to all

parties and all issues. As a result, it also allowed the cross-claim by Defendants Manis and

Johns to be re-filed without prejudice.” Within four days of the entry of this order, Manis &

Johns re-filed their cross-claim. Thus, Manis & Johns timely re-filed their cross-claim when

6

authorized to do so by the trial court.

7

For the above reasons, we find the trial court did not err by allowing Manis & Johns

to re-file their cross-claim after their cross-claim had been dismissed pursuant to an

interlocutory order, the fact it had been dismissed “with prejudice” notwithstanding.

Therefore, we affirm the trial court’s reinstatement of the cross-claim asserted by Manis &

Johns against the Allmans.

III.

For their last issue, the Allmans assert that the trial court erred by awarding damages

to Manis & Johns without holding a hearing to determine the issue of comparative fault.

They do not argue that the remedy of rescission itself was inappropriate; they only dispute

the amount of damages. We find this issue without merit.

As this court has previously stated, “[r]escission involves the avoidance or setting

aside of a transaction. It is an equitable remedy, available where the contract was induced by

fraud or duress. . . . It is intended to return the parties to the positions they were in before the

transaction took place.” Williamson v. Upchurch, 768 S.W.2d 265, 271 (Tenn. Ct. App.

1988) (internal citations omitted). Typically, “a purchaser who has been the victim of either

fraud or mistake, upon rescission, is allowed to recover the consideration or purchase price

he paid for the property.” Isaacs v. Bokor, 566 S.W.2d 532, 538 (Tenn. 1978).

The order permitting Manis & Johns to re-file their cross-claim was entered on June 19, 2002; the 6

cross-claim was re-filed on June 23, 2002.

Thereafter, Manis & Johns and the Moorheads voluntarily dismissed their respective claims against

7

the Allmans pursuant to Tenn. R. Civ. P. 41.01 with the intent to file a joint complaint against the Allmans.

Pursuant to the Savings Statute, within one year of the voluntarily dismissing their respective claims, Manis

& Johns and the Moorheads re-filed their respective claims in a joint complaint against the Allmans. See

Tenn. Code Ann.§ 28-1-105; see also Tenn. Code Ann. § 28-1-114(b) (permitting cross-claims to be re-filed

following a voluntary nonsuit).

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The trial court specifically limited the damages to “all of the down payment monies

paid.” This included $147,075.00 for the down payments made by Manis & Johns plus prejudgment interest for twelve years, as authorized by Tenn. Code Ann. § 47-14-123. See id.

(“Prejudgment interest . . . may be awarded by courts or juries in accordance with the

principles of equity at any rate not in excess of a maximum effective rate of ten percent per

annum.”). The trial court awarded pre-judgment interest at the statutory maximum rate of

10% ($14,707.50) per year, for a total of $323,565.00.

We have determined it was unnecessary for the trial court to hold a hearing on the

amount of monetary damages Manis & Johns were entitled to recover. The amount of the

down payments paid by Manis & Johns is stated in the contracts for sale and neither party

disputed that those were the amounts actually paid. The trial court also restored title to the

property in the Allmans. The return of the property to the Allmans and the refund of the

down payments to Manis & Johns, with interest as authorized by Tenn. Code Ann. § 47-14-

123, restored the parties to the positions they were in before the contracts were executed. See

Upchurch, 768 S.W.2d at 271. We therefore affirm the trial court’s decision to award Manis

& Johns a refund of their down payments and restore title to the property and mobile home

park in the Allmans.

IV.

For their part, Manis & Johns contend they are entitled to attorney’s fees pursuant to

Tenn. Code Ann. § 27-1-122, for being “forced to file a Motion to Correct the Record.” This

contention is based on the assertion that, when designating the record, the Allmans failed to

include the first appeal filed by Manis & Johns following the dismissal of their cross-claim.

Pursuant to Tenn. Code Ann. § 27-1-122, if we determine that an appeal is frivolous

or that the appeal was taken solely for delay, we may award damages against the appellant,

which may include “costs, interest on the judgment, and expenses incurred by the appellee

as a result of the appeal.” An appeal may be deemed frivolous if we are unable to address the

issues due to an inadequate record. Williams v. Williams, 286 S.W.2d 290, 297 (Tenn. Ct.

App. 2008).

As Manis & Johns correctly assert, the Allmans, as the appellants, had the duty to

prepare an accurate and fair record; however, we find that the oversight at issue, especially

in this procedurally complex case, is not sufficient for this court to deem the Allmans’ appeal

frivolous or devoid of merit. Cf. Id. at 297-98. Thus, we respectfully deny Manis & Johns’

request for attorney’s fees.

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CONCLUSION

The judgment of the trial court is affirmed, and this matter is remanded with costs of

appeal assessed against the Appellants, Joy Vail Allman and Larry Allman.

______________________________

FRANK G. CLEMENT, JR., JUDGE

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