# FILED
June 12, 1998 Cecil Crowson, Jr. Appellate C ourt Clerk IN THE COURT OF APPEALS OF TENNESSEE

AT JACKSON

______________________________________________ ARDIE TRICE, Plaintiff-Appellee, C.A. No. 02A01-9708-CV-00195 Vs. Chester Circuit No. 4072 JOHNNY LEE KELLY, TERRY SELLERS, and DAVID HALL, Defendants-Ap

pellants.

________________________________________________________ ____________________ FROM THE CHESTER COUN TY CIRCUIT COURT THE HONORABLE WHIT LAFON, JUDGE

Nathan B. Pride of Jackson For Appellee David A. Riddick of Jackson For Appellant, Ha

ll

VACATED AND REMANDED Opinion filed:

W. FRANK CRAWFORD,

PRESIDING JUDGE, W.S.

CONCUR: ALAN E. HIGHERS, JUDGE DAVID R. FARMER,

JUDGE

This appeal inv olves a suit brought by a property owner against a land surveyor for damages resulting from the unlawful cutting of timber. Plaintiff/Appellee, Ardie Trice (Trice), sued his adjacent landowner, Johnny Lee Kelly (Kelly), and Kelly’s timber cutter, Defendant,1 A detailed descr iption of the vario

us pleadings is unne

cessary becau

se the only parties to the app

eal are the Plain

tiff, Trice, and

the Defendant, H

all. 2 Terry Sellers (Sellers), for damages resulting from the unlawful cutting of his timber. Kelly and Sellers both answered the complaint and file

d cross -claims against each other seeking indemnification and other damages. They also filed third par ty com plaints against the land surveyor, David Hall. After Hall was brought in as a third party defendant, Trice was granted permission to amend his complaint and bring Hall in as a defen dant. The amended complaint alleges that Hall performed a faulty survey improperly designating theline between Kelly and Trice and that because of his failu re to mark the correct line, the timber was cut on Trice’s property instead of Kelly’s property. The complaint seeks damages against Hall as provided by T.C.A. § 43-28-312 (1993). Issues were drawn on the various pleadings. 1 Trice’s claim ag ainst Sellers and K

elly was compromised and settled befor e a trial, and the

case proceede

d to trial without a

ju ry against Defendant Hall. Trice is an owner of a tract of land adjacent to land owned by Kelly. Kelly’s land was previously

owned by Robert and Penny Hill. In1993, Hill, who was selling the land to Kelly, hiredHall, a professional surveyor, to survey the property and identify the boundaries of the tract. Halltestified that in making the survey it was necessary to establish a traverse line, which

ran i n t he area of the Kelly/Trice boundary, and for that purpose used red flags on the undergrowth. Traverse line f lags are placed

differently than

boundary li

ne flag s. These flags

were not removed when the survey was completed. Hall’s survey plat indicates that the corners of the boundary are marked, and does not indicate that the boundary line has been marked on the ground. Kelly testified that he does not remember receiving a copy of Hall’s survey, nor did he ever talk to Hall prior to the timber cutting. Short ly after the property was conveyed to Kelly, Kelly arranged with Sellers to cut timber from the property. Without consulting Hall or a copy of Hall’s survey, Kelly assumed that the red flags left from Hall’s survey marked the boundary of Kelly’s land and advised Sellers as such. Sellers testified that he was not shown a copy of the survey, that he never talked to Hall before the

cutting, and that he

relied on Kelly’s

instruction as to the

boundary lines.3 Following a bench trial, the trial court found th at Hall was negligent and apportioned sixty (60%) percent o

f the fault to Hall, twenty (20%) percent to Kelly and twenty (20%) percent to Sellers. Damage

s were doubled in a

ccordance with

T.C.A. § 43-28-312 (a)(1). Judgment was entered against Hall for $5,802.60 and, b ecaus e of the settlement as to Kelly and Sellers, the action against them was dismissed with prejudice. On appeal, Hall asserts that the trial court erred by finding him liable because he was not negligent, nor did he make any representation which was justifiably relied upon by plaintiff. Since this case was tried by the court sitting without a jury, we review the case de novo upon the record with a pre sumption of cor rectness of the f indings of fact by t

he trial court. Unless the evidence p reponderat es against the findings, we must affirm, absent error of law. T.R.A.P. 13(d). Tennessee law recognizes that under certain circumstances a third party may hold a surveyor liable on a theory of negligent misrepresentation. Tartera v. Palumbo , 224 Tenn. 262, 453 S.W.2d 780 (1970). In Robinson v. Omer , 95 2 S.W.2d 423 (Tenn. 1997), our Supreme Courtdiscu ssed essential elemen ts of a negligent mis

representation

action filed aga

inst a professional: Tennessee has adopted Section 552 o f the Restatement (Second) of Tor

ts "as the guiding principle in negligent misrepresentationactions against o ther professionals and busines s persons." Bethleh e m Steel Corp. v. Ernst & Whinney , 822 S.W.2d 592, 595 (Tenn.199 1). Section 552 pro vides, in pertinent part, as follows: (1) One who, in the course of his business, profession or employment, or in any other transa ction in which he has a pecuniary interest, suppl ies fa lse information for the guidance o f oth ers in their business transactions , is s ubject to liability for pecuniary loss caused to them by their justifiable reliance upon the in

forma tion, if he fails to exerc i se reasonable ca

re or competenc

e in obtaining or communicating the information. (2) Exceptas stated in S ubsect ion (3), the liabilit y stated in Subsection (1) is limited to loss suffered ( a) by the person or on e of a limited group of per s ons for whose benefit and guidance heintends to supplythe information o r knows that the recipient inte

nds to supply it; and2 There is no suggestion in the record that Penny Hill requested Hall to mark the

boundary line. 4 (b) through r eliance upon it in a transaction that he intends t h e information to influence or knows that the recipient so

intends or in a substantially similar transaction. Restatement (Second) of Torts , § 552 (1977) (emphasis added). In discussing the requirements for recovery under Section 552, this Court has stated that liabilit y in tort will result,

despite the lack of co ntra ctual privity betw een the plaintiff

and defendant, when, (1) the defendant is act i ng in the course of hi s business, profession, or e mp loyment, or in a transaction in which he has a pecuniary (as opposed to gratuitous) interest; and (2) the defendant supplies fault y information meant to guide others in their business transac t ions ; and (3) the defendant fails to exercise

reas onable care in obtaining or communicating th e information; and (4) the plaintiff justifia bly r elies upon th e information. John Martin Co. , 819 S.W.2d at 431 (emphasis added); accord Ritter , 912 S.W.2d at 130. Robinson , 952 S.W.2d at 427. As many as three of the aforementioned elements are not satisfied in the p resent case. In order for

Hall to be liable in the instant case, hemust have furnishe d to the plaintiff “

faulty information .” Id. Trice presented no proof at trial demonstrating that Hall’s survey was inaccurate. Testifying as an e xpert on behalf o

f Trice, Eddie Co

leman (Cole

man) expressly stated that although he had not personally surveyed the land, he did not observe an y problem withHall’s survey plat. Colemanstated that marking traverse lines, as was done in this ca se, is necessary and customary in the industry. Accor d ing to Coleman, Hall’s survey plat did not indicate that a boundary line had been marked on the property, and marking a boundary line on the property would not be necessary in the absence of a request by the customer. 2 When questioned b

y Trice’s counse

l at trial, Coleman t

estified as follow

s: Q Now, after that ’s done and the points are found, you5 remove those tra

verse points? A I’ d like to tell you that we do that, but somet imes w e forget to do that a

nd sometimes we fa

il to do that. Q Is that right or wr

ong not to do that? A Ah, there’s a reason why, I g uess , two reasons why we don’t remove all of our access surveying, other than what’s on the boundary line. O ne of them is, sometimes we feel like we may need to us e those points somewhere in the future. And so we k ee p them, where we can come back and readily find them and we might use them to star t off another sur

vey or to identify some other work. And, th

en the o ther is, ah, oh, it’s just a matter of time of getting back and taking them down. Q Is 5 months a long time or a short period of time? A Well, for the removal of a traverse line? Q Yes. A I would say it’s suff icient time. If you

had an in

t ent of removing a random traver se line, it ’s suffic ient time to get it d own. I’m sure that I’ve go t some that are pro

bably still in existence. I hope it hasn’t ca used the problems i

t’s ca used here today. Q But, they can caus e problems? A Evidently they can, yes, sir. Q That’s why you go ba ck and try to take t

hem? A Well, yes, sir. And, try not to leave it too obvious that you’ve done someth

ing different from the location of the boundary [sic] lines . . . . . Q Because

lay people such as Mr. Kelly and Mr. Tri ce would rely on those as being . . . . . . A Well, they could. There could be situations or stipulations where that it would

be obvious that they shouldn’t be relied upon, but I could see whe

re someone could

do that, yes. Significantly, Coleman did not testi fy that Hall

had deviated from

the standard of care required of surveyors under the circumstances of this case. Moreover Coleman noted that Hall’s survey plat

indicated the boundary line was a straight line. He testified that the deviation of the flags from a straight line should alert a person “that there is something wrong.” Essentially, Trice attempts to assert that Hall failed to “exercise rea sonable care in .

. . communicating the info rmation ,” and that Kelly and Sellers “justifiably reli[ed]” on the information. Robinson , 952 S.W.2d at 427. A s mentioned previo

usly, Trice has f

ail ed to6

demonstrate

that the information from Hall’s survey is false. Th ere is no pr oof that Hall breached the standard of

care in his pr ofession by not retrieving the flags. In any event, the preponderance of the evidence in the record indicates that Kelly and Sellers were not justified in relying on the fla

gs left from Hall’ s sur vey. The flags formed an uneven line, and neither Kellynor Sellers ma

de any attempt to cons

ult Hall or his surve

y plat. Instead, th

ey blindly assumed that the flags marked theboundary line. Such reliance is particularly unjustified in light of the fact that Sellers is a professional timber cutter. Moreover, there was no reliance by Trice

on any representation by Hall. The s t andard articulated in Robinson, supra, requires that the “plaintiff justifiably rel[y] upon the information.” Id. While Trice sustained d

amages, he did notsustain damage as

a result of his personal reliance on Hall’s survey. Therefore, the second, third, and fourth prongs of the Robinson standard are not satisfied. Id. Our Supreme Court has recognized the strict parameters tha

t should be observed in cases involving negligent misrepresentation. In John Martin Co. v. Morse/Diesel, Inc. , 819 S.W.2d 428 (Tenn. 1991), the Court said:

Years ago, Ultramares recognized the potential pitfalls of an unlimited action in tort based upon negligent misrepresentation in commercial transac tions . The burden is always upon the plaintiff to establish

that the supplier v

iolated his

duty to exercise due care an d competence in obtaining or communicating the informat io n. Foreseeability by the provider of the information and reliance by t

he user of the information are important safeguards.Negligence by the user of the information may be a bar to recovery. Eac h of t hese principles p rovides reasona

ble protection against the proliferationof litigation in this are

a of tort. The Restatement (2d) provisions adopted i n Tartera suggest a properly balanced approach. Id. at 435 (citing Ultramares Corp. v. T ouche , 174 N.E. 441 (N.Y . 1931); Tartera v. Palumbo , 224 Tenn. 262, 453 S.W.2d 780 (1970)). In sum, the evidence

preponderates

against the findin

g that Hall p

rovided f

alse information in a business transaction which was justifiably relied upon by either Kelly, Se llers,

or Trice. Therefore, Hall was not guilty of negligent misrepresentation, and the trial court erred in awarding judgment

against him. Accordingly, the judgment of the tria

l court against Ha

ll is vacated, and the case is remanded to the trial court for such further proc eedings as may be necessary. Costs of the appeal are assessed against Appellee.

_________________________________ W. FRANK CRAWFORD,7 PRESIDING JUDGE, W.S.

CONCUR:

____________________________________ ALAN E. HIGHERS, JUDGE

____________________________________ DAVID R. FARMER,

JUDGE