### IN THE COURT OF APP EALS OF TENNESS EE AT NAS HVILLE D ec embe r 5, 200 6 S es sio n ROB ERT JENKIN S ET AL 

### . v. CHASE BROW N ET AL 

### . Appeal from the Chancery Court for Wilson County No. 99249 C.K. Smith, Chancellor

No. M2005- 02022-COA-R 3-CV - Filed Dece mber 14, 2007

Th is appea l in vo lve s a

dis pu te re ga

rd ing thelia

bil ity fo r the str

uc tur a l de fe c ts i n a

fo ur -y e ar- old house i n a Mt

. Juliet subdivision. Shortly afte r purchasing the house fr om its original owners, the property ow ners discovere d that the house ha d been c onstructed on imprope rly compac ted fill and other de bris. When a dditional structural problems manife sted themselves, the property ow ners f iled su it i n th e Chanc e ry Cou rt fo r W ils on Cou nty se e kin g co mpe ns a tory a ndpu nit iveda ma ge s a ga ins t thec on tr a c tor

wh o buil t the ho us e a ndhis wi fe , th e origi na l ow ne rs , th e origi na l ow ne rs ’ r e a l e state agent and broker , their own re al estate agent and broker , and their home inspector. Following an e ight-d ay tria l, the jury d e te rm ine d th a t th e c on tr a c tor a ndtheorigi na l ow ne rs ha d e ng a ge d in intentional and re ckless misrepr esentation by concea ling the house’s structura l pr oblems. The jury also determined that both rea l estate a gents and the developer of t he subdivision were at fault. The jury awa rded the property owner s $58,720.80 in compensatory damage s to be apportioned among thepa rt ie s at f ault . T he jury als o aw ard e d th e pr op e rty o wn e rs $2 0, 00 0 inpu nit iveda ma ge s a ga ins t one of the original owner s and $50,000 i n punitive damage s against t he contr actor . The trial c ourt reduc ed the punitive dama ge aw ard a gainst the original prope rty owner to $14,000, and granted a jud gme nt n otw ith stand ing theve rd ic t f or thetw o rea l est ate a ge nts wi th r e ga rdto the pr op e rty owner s’ Tennessee Consum er Protection Act claims. On t his appea l, the property owners takeissue wi th the dis mis sa l of the ir c la ims a ga ins t the re a l e state a ge nts a nd the ir br ok e rs ba se d o n th e ir us e of an outdated and incomplete rea l property disclosure form. The c on tr a c tor a lso take s iss ue wi th the judg ments awa

rded a g ainst him for compensatory and punit ive damage s. We have de termined that th e tr ia l c ourt did no t er r by dis mis sin g the pr op e rt y owne rs ’ cl a ims a g a ins t th e re a l e state a g e nts and the ir br ok e rs ba se d o n th e use of the inc omp le te and

outdate d d isc los ur e fo rm . We have a lso conclude d that the prope rty owner s prese nted i nsufficie nt evidenc e to establish their c ommon-law fra ud claim ag ainst the contra ctor who built the house. Accor dingly , we r ever se the portion of the jud g me nt r e qu ir ing

the c on tr a c tor

to p ay c omp e ns ator

y and punit ive dama g e s. Tenn. R. App . P. 3 Appeal as of Right; Judgment of the Chancer y Court Af firme d in Part; Reve rsed in Part; and Rem anded
W I L L I AM C. K O CH , J R ., P.J., M. S

. , d el i vere d the opinion of the court, in which P AT R I C I A J. C OTTRE LL and F R ANK G. C LE MENT , J R ., JJ., joined.
Sha wnJ. Mc Br ie n, Le ba no n, Te nn e sse e , f or thea pp e llants , Ro be rt

Je nkins a ndSha

ro n J e nk ins

.K & P De v e l o p e r s wa s a j o i n t v e n t u r e o f B i l l Ka y a n d L e o n a r d P e a k wh o we r e f r i e n d s o f M r
. W r i g h t

. K & 1 P D e v e lo p e rs w a s a lso re fe rr e d to a s “ K & P L a n d sc a p in g , In c .”

I n m os t c i rcum st anc es , a c ont r ac t or ’ s l i ce ns e i s r equi r ed i f t he cos t of

t he com pl et ed cons t r uct i on e xce eds 2 $ 2 5 ,0 0 0 . T e n n . C o d e A n n . § 6 2 -6 -1 0 2 (S u p p . 2 0 0 7 ). -2- Todd A. Bricke r, Na shville, Tennessee , for the a ppellees, Car ol Palmer and Folk Jordan Company, In c ., d/b /a

Fol k J or da n Be tte r H ome s a ndGa rd e ns
. Douglas Berry and Alvin L. Ha rris, Na shvi l l e, Tenne ssee, f or the a ppellees, Frances G arne r and Sharon Langf

ord and A ssociates, Inc

. De a n Ro bin so n, Mt. Ju lie t, T e nn e sse e , f or theapp e lle e , Cl are nc e W ri gh t.
OP IN ION
I.
Clarenc e Wright spent r oughly thirty year s building houses and restaur ants and re novating apartments. At various times, he was licensed as an e lectric al contra ctor a nd as a ge nera l contrac tor. Af te r h e re tir e d inthe e arl y 199 0s , Mr. W ri gh t allo we d his ge ne ra l con tr a c tor ’s lic e ns e to laps e . H is retire ment did not last long. In 1993, he decide d to purcha se four lots in t wo adjac ent subdivisions in Mt. Juli et that wer e being develope d by K & P Developer s. After purcha sing the lots, Mr. Wright 1 began c onstructing houses for r esale without renew ing his genera l contrac tor’s license

. 2
One of the lots Mr. Wright purc hased w as located at 1327 Oak Valley Drive in the Quee ns Va lle y Su bd ivi sio n. Th e ne ighbo rs re fe rr e d to thelot a s the “ Qu e e n V a lle y D ump ” be c aus e K & P Deve lo pers and others used the lot to dis car d debris and tr ash – including tree branc hes, wood, c on str uc tio n m ate ri als, a ndbe d s pring s. W hil e so me e ff ort ha d b e e n ma de to c omp a c t th e fi ll materia l and debris, much of the lot was unsuit able for construction. Mr. Wright was awa re of the original condition of the lot and that the de veloper s had filled in portions of the lot. Howeve r, K & P De v el o p ers appare ntly told hi m that the building envelope – the portion of the lot on which the house would be built – did not contain fill material a nd was suitable f or building.
In 1 9 9 3 , M r
. W r ig h t b e g a n c o n s tr u c ti n g a h o u s e o n th e lo t a t 1 3 2 7 O ak V a ll e y D rive. In Ap ri l 19 94 , h e c on tr a c te d to sel l the ho us e to C ha se a ndMe lin da Br ow n. InAu gu st 1 99 4, sh ortly a ft e r the Br ow ns mov e d, the y be ga n to enc ou nte r pr ob le ms with the ho us e , inc lud ing pr ob le ms w ith th e du c t w or

k, pr ob le ms w iththeplu mbi ng , a nd e xc e ss m ois tur e in the ba se me nt. Th e y a lso experience d “nail pops” in the w alls, and in 1995, they noticed c rac king near windows on the fr ont left of the house and on the ba ck right of the house. Mr. Wright assure d the Browns that many of these proble ms were cause d by normal settling. He dispatched someone to r epair the cr acks, but the Browns dec ided to hire someone else to make the repairs. When those cra cks reopened in 1997 and new c rac ks appea

red, the Browns aga in hired someone e lse to make the r epair s.A Fr ench drai n i s es s ent i al l y a t r ench fi l ed w i t h gravel t hat r edi r ect s s urf ace and groun d w at er aw ay f r om an 3

ar ea.
Mr

. Wr i g h t w a s a c t u a l l y fi n e d f o r b u i l d i n g on a n o t h e r o n e o f t h e l o t s t h a t h e h a d p u r c h a s e d f r o m K & P 4 D e v e lo p e rs , b u t t h e b o a rd e v id e n tly c lo se d th e file o n th e B ro w n s’ c o m p la in t af te r issu in g th e fin e
.

T en n
. C o d e A n n
. §§ 66 -5-2 0 1 t o -21 2 (20 0 4 an d Su p p
. 20 0 7 ). 5

T h e B ro w n s m ain t ain t h at t h ey an sw ere d t h e q u esti o n s alo u d w h i l e M s. P a lm e r f i l l ed o u t t h e fo rm
. M s. 6 Pa l m er , on t he ot her ha nd, i ns i s t s t hat s he m er el y l ef t t he f or m w i t h t he Br ow ns and t hat t hey fi l l ed i t out

. Bec aus e t he Br ow ns do not a l l ege f r aud i n t he com pl et i on of t he f or m a nd do not cont es t t hat t hey s i gned t he f or m , t he ques t i on of
w h o fille d o u t th e fo rm is i rr e le v a n t, a n d th e B ro w n s a re b o u n d b y th e ir a n sw e rs – o r la c k o f a n sw e rs
. See Sm i t h v. Te nn. Far m er s Li

f e Reas s ur ance Co. , 21 0 S.W

. 3 d 58 4 , 59 1 (T en n
. C t

. A p p
. 20 0 6 ). -3- The Browns r emained in constant contac t with Mr. Wright re garding the pr oblems that were plaguing their house. The y wer e particularly conc erne d about the m o i s t u re in the basement. Mr. Wright neve r addr essed a ll of t he B rowns’ conce rns t o their satis fac tion. Mr. Wright had told the Browns that the problem could be remedied by installing a Frenc h drain, but he neve r installed the 3 drain. Ove r time, the re lationship between the Browns and Mr. Wright deterior ated.
Ev e ntu a lly , th e Br ow ns le arn e d th a t Mr. W ri gh t did n ot h a ve a ge ne ra l c on tr a c tor ’s lic e ns e when he built their house. In May 1997, they f iled a complaint against him with the Board for Licensing Contrac tors. They stated in their complaint that they had e ngaged l aw y er s and we re considering suing Mr. W right. As a re sult of t he B oard’ s investigation, Mr. Wright was fined $500 for building another

house in the subdivision withouta gene ral c ontrac tor’s license

. Mr. Wright 4 perf ormed some a dditional repair w ork on the Browns’ house, but the work did n o t s ati sfy the Br ow ns
. Th e Br ow ns de c ide d to se ll the ho us e in J un e 19 98 . T he y h ir e d Ca ro l Pa lme r, a

re a l e state agent a ffiliated with Folk Jordan, Inc ., to be their re al estate agent. As r equire d by the Tenne ssee Re sid e nti a l Pr op e rty Di sc los ur e Ac t, Ms. Pa lme r pr ov ide d the Br ow ns wi th a re sid e nti a l pr op e rty 5
c on dit ion dis c los ur e fo rm a nd e xp la ine d to the m that the y we restatut orily re qu ir e d to c omp le te thi s form and to pr ovide the form to potential buyers. The Brow ns and Ms. P al m er d o not agre e rega rding who filled out the form, but the Browns signed the form on June 23, 1998. 6
The form that the Browns signed on June 23, 1998 w as inac curate or incomplete in severa l significant ways. Thequestions rega rding the Browns’ a war eness of significant def

ects or ma lf un c tio ns in the fo un datio n or sla b we reno t a ns we re d. Th e Br ow ns mark e d “ no ” is r e sp on se to thequ e sti on “Are yo u aware of a ny
. . . s e ttl ing fr om any c aus e , o r s lip pa ge , s lid ing , o r o the r s oil problems?” They a lso answer ed “no” to the question rega rding whether there was any landf ill on any par t of the property. The Browns also failed to provide the date of the most rece nt survey of the pr op e rty, a lth ou ghthe y d id i nd ic a te that th e rewa s so me da mpn e ss i n th e le ft re ar o f the ba se me nt. On June 30, 1998, one wee k afte r executing the disclosure f orm, the Browns sued Mr . Wright and his wife in the Circ uit Court for Wilson County. Their complaint described the lea ks and otherThe Br ow ns e vent ual l y s et t l ed t hi s l aws ui t f or a ppr oxi m at el y $2, 200. 7

A ct of A pr i l 8, 1998, c h. 727, s ec
. 1, 1998 Tenn. Pub. A ct s 320. 8

A l t hough t he J enki ns es w er e di s s at i s fi ed w i t h m any of t he r epa i r s t hat t he Br ow ns m ade pr i or t o t he cl os e of 9

sa le , n o n e o f th o se re p a irs a re a t i ssu e in th is c a se
. -4- problems with the home and alleged that Mr. Wright had a cted ne gligently and fraudulently. They re qu e ste d $ 50 ,0 00 in c omp e ns a tory d a ma ge s a nd$1 00 ,0 00 in p un iti ve da ma ge s. 7
A re vised version of the Residential Property Disclosure Ac t became ef fec tive on July 1, 1998, ei g ht days afte r the Browns ha d exec uted their disclosure form. The new law require d 8 additional disclosures fr om the sellers of r eal pr o p er t y. Specifica lly, the new law r equire d sellers to disclose “any la wsuits or proposed law suits by or against the s eller w hich af fec ts or will affe ct the pr op e rty. ” Ms. Pa lme r d id n ot ad vis e the Br ow ns of thene w l a w anddidno t a sk the m to c omp le te a new disclosure form. Consequently, the Browns’ June 23, 1998 disclosure fo rm did not alert prospec tive buyers a

bout the Browns’ suit against Mr. Wright.
Sometimeb e tw een July 1 a nd July 3, 1998, Sharon Jenkins, acc ompanied by Franc es Ga rner , he r r e a l e state a ge nt wh o wa s af fi liate d with Sha

ro n La ng fo rd a nd As so c iate s, vis ite d the Br ow ns ’ ho us e . M s. Je nkins lik e d the pr op e rty a nd e nc ou ra ge d he r hu sb a nd , Ro be rt Je nkins , to tou r the ho us e himself. Mr. Jenkins to u re d t h e h o u s e on Jul y 4, 1998, and made an off er w hich the Browns acc epted.
On Ju ly 8, 19 98 , the Je nkins e s re c e ive d a c op y o f the Br ow ns ’ J un e 23 , 1 99 8 d isc los ur e fo rm
. They d i d n ot inquire about the missing answer s on the form. Ms. Ga rner did not call the missing a ns we rs to the Je nkins es’ att ent ion , n or didMs. Pa lme r. Ap pa

re ntl y, ne ith e r M s. Ga

rn e r n or Ms. Pa lme r r e a liz e d th a t th e dis c los ur e fo rm didno t c omp ly wi th the ve rs ionof theRe sid e nti a l Pr op e rty Disclosure A ct then in ef fec t. If they did, they did not ment i o n i t t o ei t h er the Browns or the Jenkinses.
Ac tin g o n M s. Ga

rn e r’ s adv ice , theJe nkins e s h ir e d K e n Se mpl e to i ns pe c t th e Br ow ns ’ h o u s e
. M r
. Se mp le in s p e c te d th e h o u s e o n J u ly 1 1 , 1 9 9 8 in th e c o mp a n y o f M r . Jenkins and Mr. Brown. Whe n Mr. Semple found a cra ck in the foundat i o n , M r. B ro wn told him that it had bee n cause d by settling during the first year and that it had bee n repaired. Mr. Brow n failed to mention that the cr acks ha d re- opened in 1997, ne cessitatin g fu rt her r epair s. Foll owing Mr. Semple’s inspection, Ms. Garne r we nt over the inspec tion report with her c lients, and the Jenkinses ne gotiated with the Browns rega

rding repairs they wante d made to the house prior to closing the sale. 9
The Jenkinse s’ purc hase of the house fr om the Browns was c ompleted on August 8, 1998. Within one wee k afte r moving in, Ms. Jenkins noticed a cra ck adjac ent to the bay window near the kitchen. Soon there afte r, Mr. Jenkins notice d cra cks on the outside of the house. Whe n the Jenkinses expr essed their

conce rn to Ms. Garner, she suggested that they hi re a structura l engineer

. The Jen k inses reta ined Ron Jones who inspecte d the house on Septembe r 8, 1998, and c oncluded that se ttl ing a nd c ra c kin g wa s occ ur ri ng be c aus e the fo ote rs ha d not be e n pla c e d de e ply e no ug h in toM s
. J enki ns des cr i bed t he hous e a s havi ng var i ous poppi ng and c r ea ki ng, w i ndow s pul l i ng a w ay f r om t he 10

w al l , dra ft s , w at er com i ng i n t he w i nd ow s w hen i t r ai ned, hi gh ut i l i t y bi l l s , t w i s t i ng k i t chen fl oo r s , and a gar age r endere d
u n u se a b le b e c a u se o f th e fe a r o f b ric k s fa lli n g o ff th e sid e o f th e sin k in g h o u se
.
D e fe n d a n t K e n S e m p le d ie d b e fo re trial. 11
-5- the ground. He rec ommended that the house’s foundation be re inforce d with steel pipe at a cost of approximate ly $18,200.
The Jenkinse s did not undertake the se re pair s b ecause they w ere too expensive. The y continued to live in the house e ven though they noticed that t h e cr ac k s wer e widening with the pa ssa ge of tim e
. On Ju ne 2, 19 99 , the Je nkins e s file d suit in the Chanc e ry Cou rt fo r W ils on Cou nty against the Browns, Ms. Palmer and her br oker, Ms. Ga rner and her broker , and Mr. Semple. Af ter theBr ow ns ’ ans we r p oin te d th e fi ng e r o f c ulp abil ity a t Mr . W ri gh t, the Je nkins e s a me nd e d th e ir complaint to add a c ommon-law fr aud claim against Mr. Wright and his wife

. After the Jenkinses had filed t heir lawsuit, their neighbors told them that their pr operty ha d been know n as the “ Quee n Valley Dump.” Fearing t h at t h ei r house wa s built on a landfill, the Jenkinses aske d Mr. Jones to pe rform additional tests. Mr. Jones returne d to the house on Oc tober 18, 1999. After

digging test pits near the loc ations of foundation crac ks, Mr. Jones discover ed that the footers, which were located 1.5 fee t below ground level, were sitt ing on “firm but not stiff” c lay. At 6 f e e t be low gr ou ndle ve l, M r. Jo ne s disc ov e re d co ns truc tio n d e bris m ixe d w ithc la y. At 7. 5 to 9 fee t below ground leve l, Mr. Jones found fill material that was unsuitable f or building. Based on his findings, Mr. Jones increa sed his estimated cost of r epair to approximately $39,000.
O n c e a g a in , th e J e n k in s e s d e c id e d a g a in s t r e p a irin g th e h o u s e
. T h e y li v e d in the deteriorating conditions until January of 2001, when they purcha sed another home for $210,000. 10 The Jenkinse s paid the mortgages on both home s for three year s, but e ventually they lost the Oak Valley pr operty through f orec losure.
The matter

proce eded to an eight-day jury trial from Marc h 14-23, 2005. In addition to the parties, Mr. Jone s and the Jenkinse s’ neighbors testified. The Jenkinse s also submitt ed the e xpert 11 testimony of Marbutt Gaston, a r eal e state age nt, who testified without objection rega rding the standards of

conduct e xpecte d of real estate agents. The trial court granted a partial dire cted ve rdict for Ms. Ga

rner , Ms. Palmer, and their br okers at the close of the Jenkinses’ c ase- in-chief . While the court c oncluded that Ms. Ga rner and Ms. Palmer ha d brea ched the ir duty to see to it that a prope r re a l e state dis c los ur e fo rm wa s u se d, thec ou rt

de te rm ine d th a t th e Je nkins e s h a d f a ile d to e sta

bli sh that the fa ilure to use the corr ect disclosure form had cause d them damage

. Howeve r, the trial c ourt de c lin e d to dir e c t a

ve rd ic t ontheJe nkins e s’ ne gli ge nc e c la im b a se d o n th e a ge nts ’ failu reto o btain answe rs on the disclosure form re garding the f oundation and the se ttling.
Mr. Wright also sought a directe d verdic t at t he close of the Jenkinse s’ ca se on the ground that th e ir c la ims we retim e -b arr e d a ndbe c aus e the y h a d fa ile d to pr ov e that hekn e w that th e ho us e had bee n constructe d on a landf ill. The trial court de nied Mr. Wright’s motions

.T h e ju ry all o ca t ed fau l t as fo l l o w s: 12

Rober t a nd Sha r on J enki ns 0% Chas e Br ow n 5% M el i nda Br ow n 5% Cl ar enc e W r i ght 35% W i l m a W r i ght 0% Car ol Pa l m er , a s a gent of Fol k J or dan 10% Fr anc es G ar ner , a s a gent of Sha r on Langf or d & A s s ocs
. 10% K en Se m pl e 0% K & P Lands ca pi ng, I nc. 35% -6- The jury returne d a verdic t in favor of the Jenkinses a gainst most of the defe ndants. The jury fo u n d th a t th e Br o w n s a n d M r
. W r ig h t e n g a g e d inin te n ti o n a l an d r e c k le s s mi s r e p r e s e n tati o n a nd misrepre sentation by conce alment. The jury found t hat M s. Palmer and he r broke r and Ms. Ga rner and her broker wer e guil t y of negligenc e. The jury also found non-pa rty K & P Develope rs to be a t f ault

. 12 The jury a war ded the Je nkinses $58,720.80 in compensatory damage s. The jury a lso found that Ms . Pa lme r andMs. Ga rn e r h a d v iol a te d th e Te nn e sse e Con su me r Pro te c tio n Ac t by f a ili ng to requirethe Browns to complete the new disclosure for m
. Finally, the jury determined that the Jenkinses wer e entitled to $20,000 in punitive damage s from Mr. Brown and $50,0 0 0 fr o m Mr. Wright. The trial court late r re duced the awa rd of punitive dama ges against Mr. Brown to $14,000 and granted judgments notwithstanding the verdict to Ms. Palmer, Ms. Garner, and their Rea l t o rs on the Jenkinses’ c onsumer prote ction claims.
The Jenkinse s take issue on this appea l w ith the direc ted verdic t dismissing their claim base d on the negligent use of the incorr ect r eal pr operty disclosureform and w ith the j u d g m ent no tw ith s t a n d i n g t h e v e r d i c td i s m i s s i n g t h e i r c o n s u m e r

p r o t e c t i o n c l a i m s a g a i n s tM s
. P a l m e r , M s. Garner, and their broke rs. For his part, Mr. W right takes issue with the trial c ourt’s conc lusion that the Jenkinses’ cl ai m s ag ains t him were not time-ba rre d and with the aw ard of compensatory and pu nit iveda ma ge s. II. T HE T E NN . R. C IV . P. 50.01 AND 50.02 D I SM I SS A L OF TH E J ENK I N SES ’ C LA IM S A G A INST

T HE R EAL E STATE A GE NT S AND T HE I R B ROK E RS
Th e Je nkins e s ass e rt e d thr e e c la ims a ga ins t Ms. Pal me r, Ms. Ga rn e r, a nd the ir br ok e rs . Firs t, the y c la ime d th a t th e se de fe nd a nts we rene gli ge nt b e c aus e the y f a ile d to re qu ir e theBr ow ns to f ull y answe r all the questions on the disclosure form. Second, they claimed that these de fendants were negligent bec ause the y did not r equire the Browns to c omplete the most curr ent ver sion of the re al property disclosure form which would have require d the B rowns to disclose t heir law suit against Mr.M s
. Pal m er an d her broker ar gu e o n app eal , appare nt l y for t he fi r s t t i m e, t hat t he J enki nse s ’ com pl ai nt does 13

n o t co n t ai n a ne g l i g en ce cl ai m ba sed o n t h ei r neg l i g en t fai l u re t o req u i re t h e B row n s t o co m p l et e an up d at ed dis cl o sure f orm
. W e fi nd n o m er i t i n t hi s ar gu m ent

. V i ew i ng t he J enki nse s ’ com pl ai nt und er T enn. R. Ci v. P. 8. 01 ’ s l ens , w e s ee t hat t hey al l eg ed t hat M s
. Pa l m er “ had an obl i gat i on t o us e r ea s onabl e ca r e or c om pet enc e i n obt ai ni ng a nd
co m m u n i ca t i n g i n fo rm ati o n ” a b o u t t h e p ro p e r ty a n d t h a t sh e “ d i d n o t u se re aso n ab l e c are ” in d o i n g so
. T h ey also
a lleg e d th a t M s. P a lm e r d id n o t “ a sk th e [ s] e ller s th e p ro p e r q u e stio n s a b o u t th e p ro p e rty ,” th a t th e y r e lied o n th e “ fa u lty i n fo rm ati o n ,” an d t h ey su ffere d d am ag e a s a resu l t o f t h ese ac t i o n s. E v en t h o u g h t h e Je n k in se s’ c la im s ag ain st M s. Pal m er and her br ok er w er e not as s peci fi c a s t he cl ai m s agai nst M s
. G ar ner and her broker, w e have det er m i ned t hat t hey are broad enou gh t o i n clu d e a cl ai m f or t he negl i gent f ai l ure t o re qu i r e t he B r ow ns t o com pl et e a n up dat ed d i s c l o s u r e f o r m.

M s. P a lm e r, M s. G a rn e r, a n d th e ir b ro k e rs h a v e n o t ta k e n issu e w ith th e ju d g m e n t b a se d o n th e ir fa ilu re to 14

r e q u i r e t h e B r o w n s t o f u l l y c o mp l e t e t h e r e a l p r o p e r t y d i s c l o s u r e f o r m.
L aw y ers w i t h an y am o u n t o f ex p eri en ce k n o w t h at a “j u d g m en t no t w i t h st an d i n g t h e v erdict ” i s t h e p o p u l ar, 15 i f dat ed, r ef er ence t o a post

- t r i al “m ot i on f or a j ud gm ent i n accor dance w i t h a m ot i on f or di r ect ed verdi ct

. ” -7- Wright. Third, they cla imed that these de fen d an ts’ failure to use the cor rec t disclosure form 13 vio late d th e Te nn e sse e Con su me r P ro te c tio n A c t.
The trial court permitted the first claim to go to the jury, and the jury de termined that the r eal estate a gents wer e negligent and assessed te n perc ent o f the fa ult to them. The trial court did not permit the sec ond claim to go to the jury but rather grante d a dire cted ve rdict at the c l o se of the Jenkinses’ pr oof. The trial court pe rmitted the third claim to go to the jury but then, afte r the jury found that the re al estate agents a nd their brokers had violated t he Tennessee Consumer Protection Act, granted a judgment notwithstanding the verdic t on the claim. This appea l involves only the latte r t wo c la ims

. 14
A. The Stand ard of Re view
Direc ted ver dicts under Te nn. R. Civ. P . 50.01 and judgments notwithstanding the verdict 15 under Tenn. R. Civ. P. 50.02 are re viewed using the same standar d of re view. Holmes v . Wilson , 551 S.W .2 d 6 82 , 6 85 (T e nn . 1 97 7) ; Mairose v. Fe d. Express Corp. , 86 S.W.3d 502, 511 (Tenn. Ct. App. 20 01 ); Kaley v. U

nion P lanters Nat’l Bank , 775 S.W.2d 607, 611 (Tenn. Ct. App. 1988). T hey ar e appropriate only when r easona ble minds can n o t d i ff

er as to the conc lusions to be drawn fr om the evidenc e. A l ex a n d er v. Arm entrout , 2 4 S. W .3 d 2 67 , 2 71 (T e nn . 2 00 0) ; Ea ton v . M c Lai n , 891 S.W .2 d 5 87 , 5 90 (T e nn . 1 99 4) ; Ingram v. E arthman , 993 S.W.2d 611, 627 (Tenn. Ct. App. 1998). A c a se sh ou ld n ot b e take n a way f ro m th e jury, e ve n w he n th e facts are un dispu te d, if re a so na ble persons could dra w diffe rent c onclusions from the fa cts. See Gulf, M. & O.R. Co. v. Unde rwood , 18 2 T e nn . 4 67 , 4 74 , 1 87 S.W .2 d 7 77 , 7 79 (1 94 5) ; Hurley v . Tenn. Farmers Mu t

. Ins. C o. , 922 S.W .2 d 8 87 , 8 91 (T e nn . Ct . A pp
. 19 95 ). A t ri a l c ou rt ma y, ho we ve r, dir e c t a

ve rd ic t w ithre ga

rdto an issue that can properly be dec ided as a question of law beca

use deciding pure ly legal questions is the c ou rt ’s re sp on sib ili ty, no t th e jury’ s.A t t r i al , t he J enki nse s ’ l aw yer at t em pt ed t o i nt r od uce t he up dat ed di s cl osur e for m t hroug h a rea l est at e br ok er 16

w ho w as t es t i fyi ng as an expert w i t nes s regar di ng t he du t i es o f real est at e agen t s
. R egre t t abl y, t he f orm t hat t he l aw yer i nt r od uced as E xh i bi t 8 w as not t he up dat ed di s cl osur e f orm
. Th e e xp er t poi nt ed ou t t hi s overs i gh t and t hen t es t i fi ed
r egar di ng t he corr ect s ub s t ance o f t he up dat ed f orm
. Ten n. Co de A nn
. § 66

- 5-210 ( 20 04 ) cont ai ns t he corr ect s ub s t ance o f th e d isc lo su re fo rm . T h e q u e stio n a t i ssu e o n th is a p p e a l i s Q u e stio n 1 9

. -8- In appe als from a

direc ted ver dict, the re viewing courts do not weigh the evidenc e, Conatser v. Clarksville Coca-Cola Bottling Co. , 92 0 S.W .2 d 64 6, 64 7 ( Te nn . 1 99 5) ; Benton v. Sny der , 825 S.W.2d 409, 413 (Tenn. 1992), or eva luate the c redibility of the witnesses. Benson v. Tenn. V alley Elec. Coop. , 8 68 S.W .2 d 6 30 , 6 38 -3 9 (T e nn . Ct . A pp . 1 99 3) . I ns te a d, the y r e vie w the e vid e nc e in thelig ht m os t f

a vo ra bleto the mot ion ’s op po ne nt, giv e themot ion ’s op po ne nt the be ne fi t of a ll rea sonab l e inferenc es, and disre gard a ll evidence contra ry to that party’ s position. Alexande r v. Armentrout , 2 4 S. W .3 d at 27 1; Ea to n v. McL ain , 8 9 1 S.W .2 d at 59 0; Smith v. Bridgestone/Firestone, Inc. , 2 S.W.3d 197, 199 (Tenn. Ct. App. 1999).
B. The Direc ted Ve rdict on the Claim Re garding the Failu re t o Use the U pdated Disclosure For m The Jenkinse s’ negligenc e claim against Ms. Palmer, Ms . Garner, and their broke rs arising out of their negligent f

ailure to re quire the Brow ns to complete the updated disclosure form ca used the trial court great consternation. The Jenkinses’ the ory wa s that they would no t h ave sustaine d fi na nc ia l in

jury h a d th e Br ow ns truth fu lly a ns we re d th e qu e sti on on th e re vis e d r e a l pr op e rty disclosure form rega

rding the existenc e of “ [a] ny l aw s uits or proposed lawsuits by or a gainst the seller w h ich af

fec ts or will affe ct the prope rty” beca use this information would have pr ompted 16 them not to purcha se t he property. Howeve r, at trial, neither Ms. Je nkins nor Mr. Jenkins testified that th e y w ou ld n ot h a ve pu rc ha se d th e ho us e ha d the y be e n inf orme d of the Br ow ns ’ l a ws uit a ga ins t Mr. Wright. They wer e neve r eve n asked the question.
Ms. Garne r testified that h ad s h e been awa re of the Browns’ c omplaint to the contrac tor’s licensing board, she would have asked the Jenkinses “[if] they want[ ed] to go through with it [the purcha se] or

if they wa nted to perha

ps think a litt le more a

bout it.” She also testified that if she had be e n a wa reof theBr ow ns ’ l a ws uit

a ga ins t Mr . Wrigh t, she ‘[ w] ou ld ha ve wante d to know wh a t it [the law suit] involved, if it would have made allegations of f raud and dece it.”
Mr. Jenkins testified that he “ relied on the disclosure form,” but he neve r t es t i fi ed that he wo uldno t ha ve go ne thr ou gh wi th the tr a ns a c tio n h a d th e e xis te nc e of theBr ow ns ’ l a ws uit

a ga ins t Mr. Wright been disclosed to him. Ms. Jenkins is the onl y witness who even remotely touched on this subject. During cross- examination by the Browns’ lawyer , she testified:

Yes, we wer e suing on the disclosure. . . . But again, it wasn’t disclosed to us that there w ere problems with th i s h o u s e, that the repairs had bee n done numer ous times, the walls had cr acke d. That’s ou r b a sis . A ndthela nd fi ll.The quot at i on m ar ks a r ound “ as i s ” i n t he quot at i on ha ve bee n a dded f or t he s ake of c l ar i t y. 17

T h e t ri al co u rt h ad p reviou sl y rej ect ed t h e real est at e ag en t s’ argu m en t t h at t h ey did n o t ha v e a d u t y t o requ i re 18
t h e B row n s t o co m p l et e t h e u p d at ed dis cl o sure form be cau se t h ey ha d no t be en pro v i d ed co p i es of t h e u p d at ed form b y t h e T en n esse e A sso ciati o n o f R ea l t o rs. -9- Later in the cross-e xamination, Ms. Jenkins made the point that she and her husband did not know the t rue “a s is ” c o n d it io n o f th e h o u s e b e c au s e th is c o n d it io n w a s n o t d is c lo s e d to th e m. She testified:
Th is s a ys pu rc ha se “ a s is. ” W e ne ve r kne w w hat “ a s is ” wa s.

They kne w a lot about that p ro p erty they never disc losed. And per our agent’ s deposition, w e neve r would have bought that house had we known. She w ouldn’t have a llowed us to. So we di d not know what “a s is” is. If they’re going to say now it was bought “a s is.” We ha d an ins pe c tio n to he lp u s d e te rm inethat. W e ha d a n a ge nt t o h e lp us determine. 17
At the close of

the Jenkinses’ c ase- in-chief , Ms. Palmer, Ms. Garne r, an d th e ir b r okers moved fo r a dir e c te d ve rd ic t with re ga rd to the c la ims ba se d on the failu re to re qu ir e the Br ow ns to c omp le te the updated disc losure form. Earlier in the proce eding, the trial court ha d determined that the re al estate a gents had a

duty to assure that the pr oper disclosureforms we re us ed an d that they had deviatedf

r o m th e ap p li c ab les tan d ar d o f c ar e b y f a il in g to r e q u ir e th e Br o w n s to f u ll y a n s w e r

the updated f orm. Th e b as i s of the re al estate agents’ motions for dire cted ve rdict wa s that the 18 Jenkinses had failed to prove that the Browns’ failure to complete the updated f orm had c aused the m damage

. Du ri ng le ng thy arg ume nts on the mot ion s, theJe nkins e s’ la wy e r i ns ist e d th a t ha d h is c lie nts been a war e of the Browns’ lawsuit against Mr. Wright , t h ey would have obtained a copy of the complaint and would have learned of the Browns’ numerous problems with the house, as well as the Br ow ns ’ c omp la int

to the con tr act ors’ lic e ns ing bo ardabo ut M r. W ri gh t. T he tria l c ou rt fi na lly instructed the Je nkinses’ lawye r to revie w the re cord of the proceedings with the court reporte r and to provide the c ourt with the rec ord of the te stimony of either Ms. Jenkins or Mr. Jenkins that they wo uldno t ha ve pu rc ha se d th e ho us e ha d th e y b e e n a wa reof theBr ow ns ’ la ws uit a ga ins t Mr . W ri gh t.
Af te r re vie wi ng the re c or d, the Je nkins e s’ la wy e r co uld po int to n o te sti mon y b y h is c lie nts either that they would have obtained copies of the Browns’ lawsuit against Mr. Wright or that they wo uldha ve de cli ned to pu rc ha se theho us e ha d th e y kno wnabo ut the Br ow ns ’ c omp la int

. Ac c or din gly , the tria l cou rt de te rm ine d that the Je nkins e s had faile d to pro ve that the failu reto u se the u p d a t e d d i s c l o s u r e f

o r m h a d d a m a g e d t h e J e n k i n s e s a n d a w ar d e d a d i r e c t e d v e r d i c t to Ms. Palmer, Ms. Garner, and their broke rs.
In re viewing the trial c ourt’s dec ision t o g ra n t the direc ted ver dict, we must view the evidenc e, such a s it is, i n the light mostfavor able to the Je nkinses. We a re not, howe ver, r equire d to shine the l ight so brightly that it obscure s what the evidenc e ac tually is. Giving t he testimony ofT en n
. C o d e A n n
. §§ 47 -18 -10 1 t o -12 8 (20 0 1 & Su p p
. 20 0 7 ). 19

T he r eal es t at e a gent s and t hei r broker s as s er t ed t hat t he J enki nse s di d no t pl ead t hi s cl ai m w i t h t he r equi r ed 20 p a rtic u la rity . T e n n . R . C iv . P . 9 .0 2 ; H ar ve y v. For d M ot or Cr edi t Co. , 8 S

. W

. 3 d 27 3 , 2 7 5 -76 (T en n
. C t

. A p p
. 19 9 9 ). E v e n th o u g h th e Je n k in se s m is-c ited th e se c tio n s o f th e T e n n e sse e C o n su m e r P ro te c tio n A c t o n w h ic h th e y b a se d th e ir
c la im , w e h a v e d e te rm in e d th a t t h e y p le d th e ir c o n su m e r p ro te c tio n c la im w ith su ff ic ie n t p a rtic u la rity

. -10- the Jenkinses a nd Ms. Garner the most charitable construction in favor of t he Jenkinses, we a gree with the trial court’ s conclusion t hat any rea sonable person viewing the re cord w ould conclude that theJe nkin ses faile d to pr ov e that th e re a l e statea ge nts ’ n e gli ge nt f a ilu reto r e qu ir e theBr ow ns to complete the updated re al estate disclosure form cause d them any damage

. At most, the te stimony relates to the Browns’ failure to disclose their r epeated re pairs of the cracks in the interior and exterior walls, the popping nails, and other simil ar pr oblems.
C. The Jud gment Not withstandi ng the Ver dict on the Jenkin ses’ Tennessee

Co nsum e rPr ot e c ti on A c t C lai m The Jenkinse s also asserted that Ms. Pa l m er, Ms. Ga rner , and their br okers violated the Tenne ssee Consumer Protec tion Ac t by failing to require the Browns to complete the updated r eal 19 pro p er t y d i sclosure f

orm. They c laimed that this omiss ion was an “ unfair or dece ptive act or prac tice” pr ohibited by the catc h-all provisions found in Tenn. Code Ann. § 47-18-104( a), ( b)(27)

. 20 W hil e Ms. Pa lme r, Ms. Ga rn e r, a ndthe ir

br ok e rs ins ist e d th a t th e y w e reno t le ga lly re qu ir e d to us e theup date d f

orm f or thi s tr a ns a cti on , th e y d id n ot d isp utethat th e Br ow ns ha d n ot b e e n a sk e d to complete the updated form.
The trial c ourt denied Ms. Palmer’ s, Ms. Garne r’s, and their broker s’ motions for direc ted verdic ts at the close of

the Jenkinses’ c ase- in-chief and at th e close of all the evide nce. T he jury fo un d th a t Ms . Pal mer a ndMs. Ga rn e r h a d v iol a te d th e Te nn e sse e Con su me r P ro te c tio n A c t. Howeve r, the trial court grante d their Tenn. R. Civ. P. 50.02 moti ons for a judgment notwithst anding the ver dict rega

rding this c l ai m
. T h e t rial court’s July 18, 2005 order r ecites that the “[p] laintiffs failed to prove , by a pre ponderance of t h e evidenc e, that [d] efe ndants’ negligent a cts constituted unfair or dece ptive trade prac tices.” On t his appea l, the J enkinses assert that the trial court applied a n in c or re c t le ga l stand ard wh e n it gr a nte d the jud gme nt no tw ith stand ing theve rd ic t a ndthat th e ir e vid e nc e ma de ou t a jury q ue sti on on the ir c on su me r p ro te c tio n c la ims . W e c on c ur wi th the ir

fi rs t point but not wit h their sec ond. Ruling on a moti on for a

judgment notwithstanding the verdic t is not an occa sion to weigh the evidenc e. Conatser v

. Clarksville Coca-Cola Bottling C o. , 920 S.W .2 d at 647 . The c ou rt ’s ro le is limited to r eviewing the evidenc e to determine w hether the moving party is entitled to a judgment as a m at t er o f l aw
. T h e moving party is entitled to a judgment as a matter of la w only when the evidenc e, viewe d in the l ight most favor able to the oppos ing party, will permit rea sonable pe rsons to rea ch only one c onclusion. Johnson v. Tenn. Farmers Mut. Ins. Co. , 205 S.W.3d 365, 370 (Tenn. 20 06 ); Chi ldr

e ss v . Cu rri e , 74 S.W.3d 324, 328 (Tenn. 2002) . The langua ge in the July 18, 2005 order ref erring to the “pre ponderance of the evidenc e” r efle cts that the trial court committed errorT he C ou r t of A pp eal s m ay affi r m a j ud gm ent on d i f f er ent ground s t hat t ho s e r el i ed on b y t he t r i al co urt w hen 21 th e trial c o u rt re a c h e d th e c o r r e c t re su lt. C o n tin e n ta l C a s. C o . v. S m ith , 7 2 0 S .W .2 d 4 8 , 5 0 (T e n n . 1 9 8 6 ); Sh ut t v. Bl ount , 1 9 4 T e n n . 1 , 8 , 2 4 9 S .W .2 d 9 0 4 , 9 0 7 (1 9 5 2 ); In r e Est at e of Jones , 183 S. W

. 3d 372, 378 n. 4 ( Tenn. Ct

. A pp. 2 0 0 5 ); Sh oem ake v. O m ni qu i p Int ’ l , I nc. , 1 5 2 S .W .3 d 5 6 7 , 5 7 7 (T e n n . C t. A p p . 2 0 0 3 ).

-11- by weighing the evide n ce
. Howeve r, notwithstanding this error, wecan a ddress the que stion rega rding Ms. Palmer’s, Ms. Garner’ s, and their br okers’ entitlement to a summary judgment using thec or re c t st a nd ard s. W e ha ve de te rm ine d tha t the tria l cou rt re a c he d th e c or

re c t r e su lt e ve n if

its rea soning was flaw ed. 21
The Te nnessee Consumer Protection Act a pplies to the acts or prac tices of rea l e state broke rs and age nts in the context of a sa le of re al p roperty. Ga nz e v oo rt v . R us se ll , 949 S.W.2d 293, 297 (T e nn . 1 99 7) . How e ve r, the Ac t doe s not impo se stric t liab ili ty on re a l est a te br ok e rs a nda ge nts , Ga nz e v oo rt v . R us se ll , 949 S.W.2d at 299, and it does not nece ssarily apply t o eac h and eve ry ac t that might take place during a re al estate transac tion. Thus, it i s possible that in any particular transac tion, the Act will apply to some conduct but not to other conduc t.
Con sis tent wi th its re me dia l pu rp os e , th e Te nn e sse e Con su me r P ro te c tio n A c t is br oa dly worde d. The phra se “unf air or de ceptive a ct” had not bee n statutorily defined in orde r to provide neede d flexibility to de v el o p a b o d y of law c onsistent with the application of the Fede ral Tr ade Commi ssion Act. Tuc ke r v . S ie rra Bu ild e rs , 180 S.W.3d 109, 116 (Tenn. Ct. App. 2005). T he standards f

or dete rmining whether a

particula r ac t or prac tice is unfair

or dec eptive ar e legal matter s addre ssed to th e co u rt s; while determinations of whe ther a particula r ac t or prac tice is unfair or dece ptive are addre ssed to the triers- of-f act. Tuc ke r v . S ie rra Bu ild e rs , 180 S.W.3d at 116.
Ana c t is de c e pti ve if

it c aus e s o r t e nd s to c aus e a c on su me r t o b e lie ve so me thi ng that is fa lse or that misleads or tends to mislead a consumer w ith regar d to a matter of fac t. T ucker v. S ie rra Bu ild e rs , 1 80 S.W .3 d at 11 6. Ana c t is un fair if it c aus e s o r i s li ke ly t o c aus e su bs ta nti a l in jury to consumers that is not rea sonably avoided by the consumers the mselves. Tuc ke r v . S ie rra Bu ild e rs , 18 0 S. W .3 d at 11 6- 17

. Aninj ury is no t r e a so na bly a vo ida

bleif thea c tor ’s c on du c t un re a so na bly interfe res with the c onsumers’ de cision-making by withholding important information the actor had a duty to disclose. Tuc ke r v . S ie rra Bu ild e rs , 180 S.W.3d at 117.
The Te nnessee Consumer Protection Act permits rec overy for some acts or pra ctices that are not fraudule nt or willful misreprese ntations. Smith v. Scott Lewis Chev rolet, Inc. , 843 S.W.2d 9, 12- 13 (T e nn
. Ct. Ap p. 19 92 ). But it d oe s n ot n e c e ssa ri ly f oll ow that e vid e nc e of

a c tio na blefa ult (g uil ty intent or knowledge ) is never require d. The Te nnessee Supreme Court has noted that the Ac t does no t e sta bli sh a sin glestand ardapp lic able in a ll c a se s fo r de te rm ini ng wh e the r a n a c t or pr a c tic e is unfair or dece ptive. After

revie wing Tenn. Code Ann. § 47- 18-104(b) , t he court observed that

“ tho ug h inmos t si tuatio ns a c tio na blefa ult is n ot a pr e re qu isi te to lia bil ity , in othe rs , kno wl e dg e is a pre requisite, and in sti ll others, intent to deceive is the standard.” Ga nz e v oo rt v . R us se ll , 949 S.W.2d at 300.
The c ontours of the Jenkinse s’ consumer protec tion claims against Ms. Palmer, Ms. Garne r, a ndthe ir br ok e rs arequ ite ma lle able . T he y f ir st c la imed that Ms . Pa lme r, Ms. Ga rn e r, a ndthe ir-12-

broker s, motivated by their financ ial interest in completing the sale , purposely withh el d and conce aled important information about the hous e from them. When the y rea lized they we re going to b e un ableto p ro ve that eith e r Ms. Pa lme r or Ms. Ga rn e r kne w a

bo ut the pr ob le ms w iththeho us e or theBr ow ns ’ l a ws uit

a ga ins t Mr . W ri gh t, the Je nkins e s mo dif ie d th e ir c on su me r p ro te c tio n c la im to fit the fac t that neither Ms. Palmer nor Ms. Garne r had r equired the Browns to complete the up date d d isc los ur e fo rm
. Inre sp on se to this ve rs ionof theJe nkins e s’ c on su me r pr ote c tio n claim, Ms. Pa lme r andMs. Garner te stified that they customarily did not begin using new forms until they rece ived them from theTe nn e sse e As so c iatio n o f R e a lto rs
. Th is re sp on se pr omp te d th e Je nkins e s’ la wy e r t o a rg ue in response to the motion for direc ted ver dict that “that’s not a proper pra ctice or business prac tice and it’s at least unfair if not dece ptive.” Howe ver, the Jenkinses’ law yer a lso conce ded that “the y’re [the re a l e state a ge nts ] ob lig ate d by the

. . . Te nn e sse e Con su me r Pr ote c tio n A c t, t o e xe rc ise go odfaith in d isc los ing to pr os pe c tiv e pu rc ha se rs mate ri a l f a c ts a ff e c tin g th e va lueof

thepr op e rty kno wnto them and not known to or re asonable [sic] a scertainable by a perspe ctive [sic] purcha ser.”
Thereis no evidence in this recor d that either Ms. Palmer or Ms. Garne r we re a war e of the Browns’ proble ms with the hous e betwe en 1994 and 1998 or of the fa ct that the Browns ha d filed an adminis trative complaint and a lawsuit against Mr. Wright based on numerous allege d instances of fa ulty c on str

uc tio n. Th e re is like wi se no e vid e nc e that Ms. Pa lme r o r M s. Ga rn e r d e c ide d n ot t o requirethe Browns to complete the updated r ea l p ro p er ty disclosure form because they ha d a financ ial interest in c losing the sale of the Browns’ house. While the dec ision to wait to use updated statutorily mandated disclosure forms until they wer e provided by a prof essional association might have be en negligent, a s the trial co urt found, it was not done f or the purpose of withholding important information about the house that either r eal e state age nt had a duty to disclose. Ac c or din gly , w hil e thetria l c ou rt c ho se thewr on g a na lyt ic a l path, it arri ved at th e c or re c t r e su lt when it gra nted the judgment notwithstanding the verdic t an d dismiss ed the Je nkinses’ consumer protec tion claims against Ms. Palmer, Ms. Garne r, and the ir broker s.
III
. T HE J UDGMENT F OR C OM PE NS AT ORY AND P U N I TI V E D A M A G ES A GA I N ST M R . W RI GHT
Mr. W r ig h t a ls o ta

k e s is s u e w ith th e ju d g me n t a g a in s t h im f o r b o th c o mp e n s a to r y and punitive damages. H e asse rts (1) that the trial err ed by not direc ting a verdict in his favor based on the four- year

statute of re pose in Tenn. Code Ann. § 28- 3-202 (2000) , (2) that the Je nkinses failed to present mate rial evide nce that he had intentionally or rec klessly misre prese nted the condition of thepr op e rty u po n w hic h h e ha d b uil t th e ho us e , a nd(3 ) that the a wa rdof pu nit iveda ma ge s a ga ins t him wa s exce ssive. We ha ve dete rmined that the e vidence supports the trial court’s conclusion that Mr. Wright could not take advanta ge of the four -yea r statute of r epose in Te nn. Code Ann. § 28-3- 20 2. Ho we ve r, we ha ve a lso de te rm ine d th a t th e re c or d d oe s n ot c on ta in m a te ri al evid e nc e to substantiate the Jenkinses’ common-law f raud c laim against Mr. Wright. Acco r d in g ly , th e judgment against him for c ompensatory and punitive damages must be r ever sed.
A.-13-

Mr. Wright is an experienc ed residential contra ctor. He was familiar with the l ot at 1327 Oak Valley Drive bef

ore he purcha sed it from the de veloper s in 1993. He knew that t h er e had be en a ravine or dee p gully on the lot before the development be gan, and hewas a war e that the de veloper s had plac ed fill on the bac k and fr ont portions of the lot before he purc hased it. Whe n Mr. Wright decide d to purcha se the lot , h e an d o n e o f t he deve lopers sited the location of the house on the property, and the deve loper as s u red him t hat the pad w here the house would be built had been properl y co m pacte d. Mr. Wright had no rea son to doubt the developer and had e ven see n c omp a c tin g e qu ipm e nt o n th e lot

. Mr. Wright was planning to build a home with a base ment. When hebegan the exca vations fo r the ba se me nt andfo un datio n, he e nc ou nte re d a sma ll tre e limb c los e to the su rf a c e a ndthe n s ome fill material. As a

result of this discovery, Mr. Wright moved the foundation of the house betwee n four and five fe et to the north. He proce eded w ith the construction wh en t h e n ew exca vations un c ov e re d n o o the r u nu su a l or pr ob le matic so il c on dit ion s.
Mr. Wrigh t d ec i d ed to us e a dif fer ent appr oach to c onstructing the foundation. He had experience d settling and water problems with another

baseme nt home he had c onstructed using c on c re te bl oc k f

ou nd a tio ns . H e ha d a lso ob se rv e d th e us e of po ur e d c on c re te ste m w a lls in Pitt sburgh. Afte r the e xcavati o n s fo r t h i s house re veale d the fill material, he decide d to build the ste m w a lls a ndfo un datio ns us ing po ur e d c on c re te a nd re ba r rathe r than c on c re te blo c k. As a re su lt, the footer s on the house we re w ider than usua l, and he used fifty-f ive cubic ya

rds of c oncre te on the projec t rather

than the customary fiftee n cubic ya rds.
One of the neighboring prope rty owner s, who also had e xperie nce in r esidentia l c o nstruction, watched M r. Wr i ght’s foundation work w ith some interest. He w as curious about the large foundation wa lls that Mr. Wright was c onstructing and appa rently wa lked over to the job site one day to ask Mr. Wright about it. Acc ording to the neighbor, Mr. Wright told him that he knew the develope r and that “the reason he was putt ing that wide of footers in, [was bec ause] he didn’t wa nt the house to go anyw here .”
Soon after Mr

. Wr i ght sold the house to the Browns in 1994, the Browns began to notice cra cks in the wa lls, nail-popping, and other signs of settl ing. They asked M r. Wright to examine the problems, and a fter Mr . Wright inspecte d the house, he told them that it was not uncommon for a new house to settle within the first few ye ars a fter c ompletion and that they did not have a serious problem. He also told them that the house had bee n constructe d on “original dirt.” A ppare ntly Mr. Wright undertook to make sever al cosmetic repairs. As the Browns bec ame incr easingly dissatisfied with the house, they found it more difficult to contac t Mr

. Wr i g h t , and they de cided to havethe ne e de d r e pa ir s p e rf

orme d b y o the rs . E ve ntu a lly , th e Br ow ns su e d M r. W ri gh t to re c ov e r the c os ts of these r epair s. The Browns late r agre ed to dismiss the suit after Mr . Wright agr eed to pay them approximate ly $2,200 – the cost of the disputed Frenc h drain.
When the Browns bega n negotiating with the Jenkinses about t h e s al e o f t he house, the Browns did not disclose any of the pr oblems t h ey had bee n having with the house or thedisputes and litigation with Mr. Wrigh t

. T h e only information that the Jenkinses ha d rega rding the construction and c ondition of the house was the informati o n p ro v i ded by the Browns in the r ealH e a lso tak e s issu e w ith th e tr ia l c o u rt’s d e c isio n to d e n y a d ire c te d v e rd ic t b a se d o n th e th re e -y e a r sta tu te 22 of l i m i t at i on s f or r eal proper t y i n T enn. Co de A nn
. § 28

- 1-105 ( 20 00 )

. Th i s i s s ue has l i t t l e m er i t becaus e i t i s cl ear t hat t h e Je n k i n ses fil ed t h eir su i t w i t h i n t h ree y ea rs after d i sco v erin g t h e stru ctu ral p ro b l em s w i t h t h e h o u se, as w ell as tho se w ho w er e r es po nsi bl e. -14- property disclosure form and the information provided by th ei r home inspec tor and the inspec tor reta ined by the lende r. The Je nkinses never talked to Mr. Wright about the house.
B.
Mr. Wright first insis ts that the trial court e rre d by failing to d i re ct a v er dict in his favor beca use the Jenkinse s’s complaint was ba rre d by the four- year

statute of re pose in Tenn. Code A nn. § 28-3-202. While the Jenkinses conce de that their suit was filed more than fours ye ars a fter the

22 substantial completion of the house, they insist that Mr. Wright c annot take advanta ge of the fouryear statute of repose in T enn. Code Ann. § 28- 3-202 bec ause he was guilty of fra ud in connec tion with the construction of the improvement. Tenn. Code Ann. § 28-3-205( b) (2000). Thus, the pivotal question here is whether the Jenkinses pre sented suff icient evidenc e to s upport the conc lusion that Mr. Wright was guilty of fraud in c onnection with the construc tion of the house. While the langua ge of Te nn. Code Ann. § 28-3- 205(b) ha s not been sub j ec t ed to frequent int e rp re tatio n b y th e c ou rt s, theTe nn e sse e Sup re me Cou rt ha s ma de it c le ar that th e statut e c a n o nly be triggere d by fraud involving the construction of the improvement. Chrisman v. Hill Home D ev., Inc. , 9 78 S.W .2 d 53 5, 53 8, n. 5 ( Te nn . 1 99 8) . W hil e fr aud ule nt c on c e a lme nt o f a c aus e of a c tio n w ill toll the running of the applica ble statute of limitations, fraudulent c oncea lment of a c ause of action is not the sort of “fr aud” that will trigger Tenn. Code Ann. § 28- 3-205(b)

. The Jenkinse s’ theory of

rec overy against Mr. Wright was that he had fr audulently conc eale d from the Browns that the house had be en constructed on improperly compacted fill materia l and that the nail-popping and the cra cking i n the i nterior and exterior walls were ca used by settling resulting fr om the po or ly c omp a c te d f ill un de r the ho us e . M r. Br own te sti fi e d th a t w he n p ro ble ms f ir st appea red, Mr . Wright assure d him that there we re no serious problems with the house a nd that the house had been constructe d on “original dirt.” Mr . Wright admitted that he did not tell the Browns that portions of the lot had bee n filled in or t hat he had moved the origi nal l ocation of the hous e af ter uncovering some fill material. Howe ver, he insist ed t h at the house ha d been pr operly sited and properly constructed. The jury spe cifica lly determined that Mr. Wright “did enga ge in fra ud, as define d by the Court, as intentional or re ckless misrepr esentatio n or misrepre sentation by conce alment.”
W he n th e e vid e ntiary fou nd a tio n o f a jury’ s v e rd ic t ha s b e e n a pp ro ve d b y th e tria l c ou rt , Tenn. R. App. P. 13(d) limits the r o l e of the appellate courts to determine whether the re cord contains suffic ient materia l evidenceto support the verdic t. See, e .g. , Rey nolds v. Oz a r k M otor Lines, Inc. , 887 S.W.2d 822, 823 (Te n n. 1994). Based on our revie w of the r ecor d, we ha ve conclude d that it con tains sufficient mate rial evide nce to support the jury’s conc lusion that Mr. Wright had committ ed “fraud” with rega rd t o his dealings wit h the Browns by conc ealing the e xtent to which fill material had be en used on the lot and by asserting that the house had be en construc tedT h e t ri al co u rt ap p eared t o recog n i ze t h i s d i st i n ct i o n du ri n g i t s co l l o q u y w i t h t h e l aw y ers regard i n g the j u ry 23 i nst r uct i on s
. U nfor t un at el y, t he j ury i nst r uct i on s t hat w er e a ct ual l y gi ven d o no t cl ear l y re f l ect t hi s di s t i nct i on
. W e need
n o t d isc u ss th e a d e q u a c y o f th e in stru c tio n s fu rth e r b e c a u se n o n e o f th e p a rtie s h a v e c h a llen g e d th e m o n th is a p p e a l. -15- on “original dirt.” T his conduct amounts to “fr aud . . . in per forming t h e
. . . construction of” the house for the purpose of Tenn. Code Ann. § 28-3-205( b). Ther efor e, Mr. Wright was not entitled to assert the f

our-ye ar statute of

repose in Tenn. Code Ann. § 28- 3-202 in this case.

C.
Mr. Wright also takes issue with the jury’s c onclusion that he had committed common-law fraud against the Jenkinse s. He insists that the jury’s verdic t is not supported by material evidenc e beca use the Jenkinse s prese nted no proof that they ever talked with him when they we re de ciding whether to purcha se the house. He ar g u es that a finding that he c ommitt ed fr aud against the Jenkinses cannot stand without evidence that he made any re prese ntations directly to the Jenkinses upon which they r easona

bly relied. The Jenkinses i nsist that the evidence r egar ding Mr. Wright’s dealings with the Browns provide s sufficient e vidence to support their claim that Mr

. Wr i g h t had c omm itt e d c omm on -l a w f ra udthat ha d c aus e d th e m dama ge . M r. W ri gh t ha s th e be tte r a rg ume nt.
It is i mpo rt a nt t o n otea t th e ou tse t of thi s d isc us sio n th a t th e “ fr aud ” th at is rele va nt w ith rega rd to the application of Tenn. Code Ann. § 28- 3-205(b) is diff ere nt from the Jenkinses’ commonlaw fr aud claim. In the c ontext of Tenn. Code Ann. § 28-3-205( b), the fr aud nec essary to preve nt a def endant f rom invoking the four- year statute of re pose in Tenn. Code A nn. § 28-3-202 ne ed not be made direc tly to the plaintiff. The same is not nece ssarily the ca se with rega rd to common-law fr audc la ims

. 23
This court has held that re mote purcha sers of improve ments to real pr operty who ha ve had no direc t de alings with the contra ctor who c onstructed the improve ments may pursue a negligence claim against the contrac tor. Br igg s v. R iv e rso un d Lt d. P’ sh ip , 942 S.W.2d 529, 532 (Tenn. Ct. App. 1996). Howeve r, we have never held t hat remote purcha sers may pursue c laims against contra ctors ba se d on a ny oth e r the orie s of lia bil ity

. In fa c t, we state d e xp lic itl y inBriggs v. Riversound Limited Partnership that our holding in the case was li mited to negligence claims and that it did not extend to any other c laims that remote purc haser s might m ak e. Br igg s v . R iv e rso un d Lt d. P’ sh ip , 942 S.W.2d at 532. Thus, this c ase require s us to de termine whe ther a remote pur chase r may a ssert a c ommonlaw fr aud claim against a contra ctor ba sed on fr audulent misrepr esentations to o r co n cealment of information from someone other than the remote purcha ser. This c ourt has held that privity does not preve nt remote purc haser s from assert i n g a fr aud claim against develope rs who re prese nt to the public that their deve lopment is suit able f or re sidential construction whe n they know of latent conditions that could result in e conomic injury to the purcha sers a nd subsequent purc haser s. CooperW e h av e also e x t en d ed t h i s h o l d i n g t o n eg l i g en ce claim s asserted b y rem o t e p u rch ase rs ag ain st d ev elo p ers. 24 F ul l i ng t on v. M eado w s , I nc. , No

. 0 3 A0 1

- 9 2 1 2

- C A- 0 0 4 3 9 , 1 9 9 3 W L 1 6 6 2 8 7 , a t * 5 ( Te n n
. C t

. Ap p
. M a y 1 8 , 1 9 9 3 ) ( No T en n
. R

. A p p
. P. 1 1 ap p l i cat i o n fi l ed ).

“I nt ent i onal m i s r epr es ent at i on, ” “f r audul ent m i s r epr es ent at i on , ” an d “ f r aud” a r e s ynonym ous a nd 25 in te rc h a n g e a b le ter m s. C on cr et e Spa ces , I nc. v. Send er , 2 S

. W

. 3 d 90 1 , 90 4 n.1 (T en n
. 19 9 9 ).

-16- v. C ordova Sand & Grave l Co. , 485 S.W.2d 261, 267 (Tenn. Ct. App. 1971). We ha ve dete rmined 24 that this prece dent does not authoriz e the Je nkinses to pursue a c ommon-law fr aud claim a gainst Mr. W ri gh t.
The e lements of a common-law fraud claim include (1) an intentional misreprese ntation of 25 an existing fac t, (2) knowledge of the represe ntation’s falsity, and (3) injury to the plaintiff caused by rea sonable reliance on the misrepre sentation. First Nat’l Bank v. Brooks Farm s , 821 S.W.2d 925, 92 7 ( Ten n. 19 91 ); Lopez v. Taylor , 195 S.W.3d 627, 634 (Tenn. Ct. App. 2006). A s a gene ral matte r, themis re pr e se ntatio n mu st b e ma de to the plaint if f a nd theplaint if

f mus t r e a so na

bly re ly t o his or her detriment on the misrepr esentation. Speake r v. Cates Co. , 879 S.W.2d 811, 816 (Tenn. 1994). Although liability m ay be e xtended to third per sons, this is done only when the re is evide nce that the def

endant madethe misrepre s en t at i o n with the intention and understanding that the third parties would rely on the information. Arcata Graphics Co. v. He idelberg Harris, Inc. , 874 S.W.2d 15, 23 (Tenn. Ct. App. 1993).
Th e Te nn e sse e Sup re me Cou rt re c e ntl y c on fr on te d a n iss ue sim ila r t o th e on e be fo reus in another case involving the sale of residential property. The remote purchaser s of t he prope rty filed suit against the seller’ s prede cessor -in-title afte r they discove red that the prede cessor-in-title had ille g al l y s ubdivided the prope rty. A jury re turned a verdic t for the pur chase rs. The Te nnessee Supreme Court vac ated the judgment on the pur chase r’s intentional misrepre sentati o nc la im

. I nli ght of the e ssentially undisputed evid en ce t h at the seller ’s pre dece ssor-in-title had made no repr esentations of any kind to the purcha sers, the c ourt conc luded that no cause of action existed beca use “[ t]hereis simpl y no evidenc e that

. . . [the seller’s predece ssor-in-title] had any role in the

. . . [seller ’s] sale of t he property t o the . . . [purc haser s].” Whaley v. Pe rkins , 197 S.W.3d 665, 671- 72 (Tenn. 2006)

. The Jenkinse s’ fra

ud claim against M r. Wr ight mustmeet the sa me fate. The Je nkinses c on c e de that th e y n e ve r t a lke d w ithMr . W ri gh t a bo ut the ho us e . L ike wi se , the re is no e vid e nc e in the re cord that the Jenkinses we re privy to any of the misrepr esentations that Mr. Wright may have made to the Browns r egar ding the structura l sta bility of the house. Acc ordingly, there is no evidence upon which the jury c ould have concluded that the J enkinses relied on any misrepr esentations that Mr. Wright may have made . Thereis likewise no evidenc e that whe n Mr. Wright repr esente d to Mr. Brown that the house w as construc ted on “original dirt” that he intende d or under stood that anyone other than Mr . Brown would re ly on the statement. Thus , in light of the essentially undisputed evidenc e that Mr. Wright had no role in the Browns sale of the house to the Je nkinses, the Jenkinses cannot r ecove r fr om Mr. Wright for fraud.
D.A llo c a tin g fa u lt is p e c u liar ly w ith in th e p ro v in c e o f th e ju ry
. A c c o rd in g ly , n e ith e r tria l c o u rts n o r a p p e llate 26

c o u rts m a y re a llo c a te fa u lt. Jones v. Idl es , 1 1 4 S .W .3 d 9 1 1 , 9 1 3 -1 4 (T e n n . 2 0 0 3 ); Tur ner v
. J or dan , 957 S. W

. 2d 815, 8 2 4 (T e n n . 1 9 9 7 ); H o d g e v . S ta te , N o. M 2004- 00137- CO A

- R3- CV , 2006 W L 36905, a t *5 n. 3 ( Tenn. Ct

. A pp. J an. 5 , 2 0 0 6 ) (N o T e n n . R . A p p . P . 1 1 a p p lica tio n filed ); Fye v
. Kenne dy , 9 9 1 S .W .2 d 7 5 4 , 7 6 2 (T e n n . C t. A p p . 1 9 9 8 ). -17- Our conclusion that the J enkinses cannot rec over c ompensatory damages a gainst Mr. Wright provides the answer to Mr. Wright’s cha llenge to the punitive damageawa rd. In Tenne ssee, ther e can beno claim for punitive damages a lone. Thus, without an awa rd of c ompensatory damages or any other sort of re medial re lief, an awa rd of punitive damages c annot stand. Liberty Mut. Ins. Co. v. Stev enson , 212 Tenn. 178, 180, 368 S.W.2d 760, 761 (1963) (punitive damage s cannot be awa rded in the abs e nc e of

a c tua l dama ge s) ; B & L Cor p. v. Thomas & Thorngren, Inc. , 162 S.W.3d 189, 223 (Tenn. Ct. App. 2004) ( punitive damages c annot be a war ded in the abse nce of actua l damages) ; Oakleyv. Simmons , 799 S.W.2d 6 6 9 , 6 7 2 (Tenn. Ct. App. 1990) (injunctive relief can support an awa rd for punitive damages)

. Because the Jenkinses have not succe eded in obtaining compe nsatory da ma ge s f

ro m Mr . W ri gh t onthe ir

fr audc la im, the y c a nn ot re c ov e r p un iti ve da ma ge s f ro m hi m either.
IV.
The dismissal of the J enkinses’ claims against their a gents and broke rs base d on their fa ilure to require the Browns to complete an updated disclosure form is aff irmed. The judgment a gainst Mr. Wright for

compensatory and punitive dama ges is reve rsed. Because t he jury allocate d fault t o Mr. Wright, the judgm ent against all the defendants mus t be vac ated and the ca se re manded f or a ne w tria l. W e ta x th e c os ts o f this app e a l in e qu a l pr op ortio ns to Rob e rt a nd Sha ro n Jen kin s, a ndthe ir 26 surety; t o C ar o l Palmer and Folk Jordan Company, Inc ., d/b/a Folk Jordan Better Homes and Gar dens; and to Franc es Ga rner and Sharon Langford and Associates, Inc., for which exe cution may issue, if nec essary.

______________________________ W IL LI AM C. K OC H, JR. , P. J. , M .S.