1 

### IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILL E October 14, 2008 Session


### RURAL DEVELOPME NTS, LLC

v. JO HN H. TUCKE R, CLARA TUCKER, GEN E C ARMA N REAL ESTA TE A ND AU CTION S F AM ILY PARTNERSHI P, LP d/b/ a G ENE CARMAN REAL ESTAT E AND AU CTION , G ENE CA RM AN AN D B ARRYWITCH ER
Appeal f rom the Chancer y Court of Macon County No. 4035 C.K . Sm ith, Chan cellor

___________________________________ No. M2008- 00172-COA-R 3-CV - F iled Janu ary 14, 2009

___________________________________ Th is c a se inv olv e s a lle g a tio ns of int e nti on a l mi sr e pr e se ntatio n a nd a ss oci ate d c a

us e s o f a c tio n a ll related t o the s ale of a spring for commerc ial development. Appellant contends that the output of the spring was misrepr esente d. The trial court g rante d summary judgme nt a s to a number of ca uses of ac tion, and the appe llant then non-suited his remainingcla i m s an d appea led. For the re asons state d h e re in w e a ff

ir m th e tr ia l c ourt

.

Te nn. R . A pp. P . 3 App e al a s o f Rig ht ; J udgm e nt of t he Cha nc e r y C our t A ffirm e d.

W A LTER C. K

UR TZ , S R

. J ., delivere d the opi nion of t he court, in which F RAN K G. C L EME NT , J R ., J ., and A NDY D. B E NN E TT , J ., joined. Christopher J . Oliver a

nd L aura M. Wi lliams, Nashville, Tennesse e, for the appe llant Rural De ve lop me nts , L L C.

B. K eith Wil liams and J ames R. Stocks, L ebanon, T ennesse e, f o r t h e ap p ell ees John and Clara Tucke r. Roby n Be ale Williams and Derr ick A. F ree , Nashville, Tennessee, for the a ppellees G ene Ca

rman, Ba rry Wit cher , Gene Carman Rea l Estate and Auc tion, and Gene Carman Rea l Estate and Auction F a mil y Part ne rs hip , L P.2 OP IN ION

I. P r oc e dur al B ac kgr ound

Th e c or po rate pla int if

f/ a pp e lla nt, Rur a l De ve lop me nts , L L C (“ RD ” ) purc ha se d re a l pr op e rt y in order to c ommercia lly

develop a

spring on the land. RD is involved in the comm erc ial sale of bottled water . The law suit arose due to a lleg ed misrepre sentations made by the sellers (the “ Tucke r defe ndants”) a

nd the seller’ s ag ents (the “Carma n defe ndants”) to RD related to the output of the spring . RD contends that the Tuc ker a nd Carman de fenda

nts told R D befor e the sa le that the spring produc ed 33,000 g allons of wate r per hour. Ac cordingto RD, after the sale it discover ed that the actual o u tput was 95% less (533 to 744 g allons per hour .); RD contends that it would neve r have purc ha se d th e land

bu t f or the mis re pr e se ntatio n. RD so ug ht r e sc iss ion and /or dama g e s.
RD c on te nd e d th a t a lle g a tio ns of fa lse state me nts a

bo ut t he ou tput of

the sp ri nge nti tle d h im to pursue the f

ollowing c auses of

action: 1. Misrepre sentation 2. Fr aud in the induce ment 3. Neg lige nt misreprese ntation 4. I ntentional misrepre sentation 5. Br eac h of contra ct 6. F ru str a tio n o f p ur

po se 7. Neg lige nce 8. Unjust enrichment 9. Tenne ssee Consumer Protec tion Act (TCPA) 10. Civil Conspiracy

The Te nnessee Consumer Protection Act claim alleging dece ptive acts wa s only alleg ed ag ainst the Carman de fenda

nts.
The e vents g iving r ise to this lawsuit occurre d in Ma y 2 0 0 4

. The c omplaint was filed on J une 1, 2005, and the second a mended c omplaint was filed on Mar ch 16, 2007.

On No v em b er 26, 2007, RD f iled a Motion for Summary J udg ment on its claims for int e nti on a l mi sr e pr e se ntatio n, ne g lig e nt m isr e pr e se ntatio n, vio la tio n of TCP A, ne g lig e nc e , f ra ud in the induceme nt, frustration of pur pose, and re s ci s s i o n of the c ontrac t. The Carma n and Tuc ker defe ndants also filed their Motions for Summary J udg ment on November

26, 2007.

The c ross Motions for Summary J udg ment wer e hea

rd on Dec ember

10, 2007. At the hear ing, c ounsel for a ll parties made or al ar g uments; the trial court itself, without objection, ca lled
s e v e r a l w i t n e s s e s an d

h e ar d t h e i r t e s t i m o n y.
The tr ia l c o u rt d e n ie d RD ’ s mo ti o n in it s e n ti r e ty

. T h e tr ia l c o u rt th e n g r an te d in p art and denied in par

t the defe ndants’ motions. The cour t dismi ssed a number of the claims including the3

TCP A c la im a g a ins t th e Carm an d e fe nd ants . T he c ou rt le ft int a c t se ve ra l su

bs tanti a l c la ims

. Thus, afte r the rulingabove, the rema ining c laims were : 1. I nte nti on a l mi sr e pr e se ntatio n a g a ins t a ll d e fe nd ants bu t on ly ba se d on re c kle ssn e ss; and

2. Ne g lig e nt m isr e pr e se ntatio n a g a ins t a ll d e fe nd ants ; Al tho ug h n ot a

c a us e of a c tio n, the re me dy

of re sc iss ion

re ma ine d b e fo re the c ourt

. RD, being dissatisfied with the ruling of the c ourt and in some conf usion, as the ca se wa s set for tria l the next day , non-suited the re maining c laims.

The trial c ourt’s orde r conta ined this final summary of its action: I t is the re fo re OR

DE RED that th e c la ims fo r b re a c h o f c on tr a c t, frustration of purpose, ne g lige nce, unjust enr i ch m ent, fra ud in the inducement ( based on intentional or know ing ac t s ); intentional mis re pr e se ntatio n ( ba se d o n in te nti on a l or kn ow inga c ts) ; and

c ivi l
c on sp ir a c y

are dis mis se d a s to th e Tu c ke r d e fe nd ants . I t is
a dd iti on a lly

ORDE RED that th e c la ims fo r neg lig e nc e , c ivi l conspirac y , intentional mis re prese ntation (based on intentional or knowing ac t s ) and violation of the Tennesse e Consumer Protec tion Ac t are dis mis se d a s to the Carm an d e fe nd ants

. For purposes of c larification, the co u rt finds that summary judgmen t i s not appropriate in favor of the de fenda

nts on the fo llo wi ngc la ims :

• I nte nti on a l Mi srepr e se ntatio n a g a ins t a ll d e fe nd ants (on the ba sis of rec klessness only );

• Ne g lig e nt M isr e pr e se ntatio n a g a ins t all d e fe nd ants ; and

• Rescission a g ainst defe ndants J ohn and Clara Tucke r. Subsequent to the summary judgme nt hear ing on this matter, plaintiff filed a

written Notice of Dismiss al o n Dec ember 11, 2007, advising the C ourt that it was taking a voluntary dismiss al pursuant to Tenn. R

. Civ. P. 41.01. As the remaining c laims that the plaintiff alleg ed ag ainst all defe ndants have now been voluntar ily

dismiss ed, this Court, seeing no just re ason for delay , enter s this Orde r as a final Orde r on the dismissed claims pursuant to Tenn. R. Civ. P. 54.02.

Orde r of De cembe r 20, 2007. On January 18, 2008, RD filed its Notice of Appe al.

II. Issu es Ap pe lla nt RD s ta te s th e iss ue s a s f oll ow s:
1. Whether the trial c ourt err ed on its ruling of limit ing RD’ s4 intentional misreprese ntation claim by denying RD the opp o rt unity

to go f orwa rd on the theor

y of intentional misrepre sentation on any basis other than the T u ck er de fe nd ants ’ o r t

he Carm an d e fe nd ants ’ r e c kle ssn e ss.
2. Whether the trial c ourt err ed in f inding that RD’s Te nnessee Consumer Protection Act claim was barre d by the Statute of L imi ta tio ns

. 3. Whether the tri al cour t erre d in gr anting RD’s motion for summary judgme nt on the Tenne ssee Consumer Pro t ection Ac t c la im a g a ins t th e Carm an d e fe nd ants , w he n th e re wa s a g e nu ine iss ue of ma te ri a l fa c t a s to wh e the r def e nd ants ’ conduct amounted to an unfa ir or dec eptiv e act or prac tice resulting in an asc erta inable loss of money to RD.

4. Whether the trial c ourt err ed in di smissi ng RD’s neg lige nce claims ag ainst defe ndants on g rounds that it was duplicative of RD ’s ne g lig e nt m isr e pr e se ntatio n c la im.

5. Whether the trial court err ed in dismi ssing RD’s f rustration of purpose c laim as a matter of law.

6. Whether the tr i al court erre d in limi ting RD’s f raudule nt inducement c laim a g ainst the Tucke r def endants by

denying it the opportun i t y t o go forwa rd on the theor

y of fr audulent inducement o n any

basis other than the rec kless conduct of the de fe nd ants

. 7. Whether the trial c ourt err ed in conduc ting the summar y judg me n t p r o c e e d in g b y e li c it in g an d

c o n s id e r in g th e li ve tes t i m o ny of par ty witnesses sworn in a

nd examined by

the
co u rt d u ri n g t h e h ea ri n g.
8. Whether the trial c ourt err ed by direc ting the e ntry

of judgme nt in acco rd an ce w ith Rul e 54.02 of the Tenne ssee Rul e s o f C ivi l Pr oc e dure wi thou t any dis c us sio n, argume nt, or dete rmination as to whether there was just rea son for de lay ingthe e ntr

y of the jud g me nt.

On the oth e r h and , th e Carm an d e fe nd ants state the ir iss ue s a s:
1. Whether the trial c ourt err ed by denying summar

y judgme nt to Gene Car

man, Ba rr y Wit cher , Gene Carman Rea l Estate and Auc tion, and Gene Carman5 Real Estate and Auction Family Partnership, L P reg ardingRD’s intentional
m i s r e p r e s e n t a t i o nc l a i m i ni t s e n t i r e t y.
2. Whether the trial court err ed by denying summar

y judgme nt to Gene Carman, Ba rry Wit cher , Gene Carman Rea l Estate an d Auction, and Ge ne Carma n Real Est ate a

nd Auction Fa

mily Partnership, L P reg arding RD’s neg lige nt mis re pr e se ntatio n c la im.

3. Whether the trial c ourt was c orre ct in g ranting s u m m ar y judgme nt to Gene Carman, B arr

y Wit cher , Gene C arma

n Real Estate a

nd Auction, and Ge ne Carman Rea l Estate and Auction Family Partnership, L P reg ardingRD’s claim of ne g lige nce.
4. Whether the trial court was corr ect in g ranting summary judgme n t t o Gene Carman Real Estate and Auction Family Partnership, L P reg ardingRD’s claim of a Tenne ssee Consumer Protec tion Act violation.

The Tuc ker de fenda

nts simpl y

state:
Whether the trial court proper ly g rante d summary judgme nt in favor of the Tu c ke r a

pp e lle e s, or

wh e the r f

ull su mma

ry jud g me nt s ho uld have be e n g ra

nte d in fa vo r o f t he Tu c ke r d e fe nd ants

. The Court appr eciates the above -stated issues, but afte r oral argument befor e thi s Court and consideration of the entire r ecor d, we c ann o t b u t co n cl u de that the g rava man of the a

ppeal is the finding of t h e t ri al court on summary judgme nt that the appellee s did not act “intentionally and kn ow ing ly

wi th r e g ard s to any

re pr e se ntatio ns ma de by the m.” Th e tr ia l c ourt ’s fi nd ingof no via ble TCP A c la im i s a lso c e ntr a l to thi s a pp e a l.

III. Stand ard of Review

Th is Co u rt’ s s ta

n d ar d f o r r e v ie w in g a

tr ia l c o u rt’ s g r an ti n g o f a mo ti o nf

o r s u mm ary judgme nt pursuant to Tenn. R. Civ. P. 56 h as b ee n s t at ed often. “ The pa rty seekinga summary judgme nt bear s the burden of demonstrating that no g enuine disput e of material fa ct exist s and that it is entitled to a judgme nt a s a matter of law.” Ferguson v. Nationwide Prop. & Cas. Ins. Co. , 218 S.W .3d 42, 48 (Tenn. Ct. App. 2006) (citations omitted). “In deter mining whether or not a

g enuine issue of mater ial fac t exi sts for purposes o f s u m m ary judgme nt . . . the trial court must take the str on g e st l e g iti ma te vie w o f t he e vid e nc e in f

avo r o f t he no nmo vin g pa

rt y , a llo w a ll r e a so na

ble infere nces in favor of that party , and dis car d all counter vailing e vidence .” By rd

v . H all , 847 S.W .2d 208, 210-11 (Te nn. 1993) (c itations omi tted). “When the par

ty seeking summary judgme nt makes a proper ly supported motion, the bur den shifts to the nonmoving par ty to s et fo rt h specific fac ts establishing the e x istence of disputed,6

m aterial fac ts which must be resolved by the trier of

fac t.” Ba in v . W

e lls , 9 3 6 S. W. 2 d 618, 622 (Tenn. 1997) ( citing Byrd, 847 S.W .2d at 215). “I f a fac tual dispute exis ts, w e must then de termine whether the fa ct is material to the claim or defe nse upon which the summary judgme nt is predicate d
an d w h e th e r th e d is p u te d f a c t c r e a te s a g e n u in e is s u e f o r trial.” Ca ntrell v. Dek alb County, 78 S.W .3d 902, 905 (Tenn. Ct. App. 2001) ( citations omitt ed). “Summary

judgme nt is not a disfa

vored proce dural de vice a nd may be used to c onclude a

ny c iv il c a s e , in c lu d in g n e g li g e n c e c a s e s , th a t c anb e an d s h o u ld b e r e s o lv e d

o nle g a l i s s u e s a lo n e [. ]” F r ug e v

. Doe , 952 S.W .2d 408, 410 (Tenn. 1997) . I t is not, however, a substitut e for

“the tria l of issues of fa ct.” Id. “Summary judgme nt is only

appropr iate whe n the facts and the lega l conclusions draw n from the f

acts re asonably

permit only

one conc lusion.” Ri c hb e rg e r v . W est C lin ic, P .C. , 152 S.W .3d 505, 5 1 0 ( T e n n

. Ct

. A p p

. 2 0 0 4 ) ( c it a ti o n s o mi tt e d )

. We r e v ie w a tr ia l c o u rt’ s aw ar d

of
su mma ry jud g me nt de novo without attaching any presumption of cor

rec tness to the decision below, “and the task of the a

ppellate c ourt is confined to re viewing t h e rec ord to deter mine whether

the require ments for summ ary judgme nt have been met.” Keasler v. Estate of Keasler , 973 S.W .2d 213, 217 (Tenn. Ct. App. 1997) ( citing Carvell v. Bottoms , 9 00 S.W. 2d 23 , 2 6 ( Te nn . 1 99 5) ); Se e a lso Ma rti n v . No rfo lk

So uth e rn , ____ S.W .3d ____ , 2008 WL 4963512 (Tenn. N ov. 14, 2008).

IV . F ac tu al B ac kgr ound Plaintiff/appellant R D an d i ts employ ee John Cook develop proper ty containing natura l sp ri ng s f or c omm e rc ia l us e . RD pr e vio us ly de ve lop e d p ro pe rt

y c on ta ini ng wate r so ur c e s, and thi s water was bott led under numerous brand names, such as Nestle Pure L ife. Mr. Cook was employ ed by Nestle fr om J une 8, 2001, to September 20, 2004, as Ne stle’s projec t manag er f or Tenne ssee.
J ohn H. Tucke r and his wife Clara Tucker (“Tuc ker defenda nts”) were the owner s of a farm consisting of

more than 137 acr es. The Tuckers decided to sell their farm and e ng ag ed Ge ne Carma n Re a l E state and

Au c tio n a

nd B arr y Witc he r t o s e ll the ir

fa rm in t we nty -f ive tr a c ts at an a

bs olute
a uc tio n h e ld o n M ay

8, 20 04 (col lec tive ly

Ge ne Carm an Re a l E state and Au c tio ns F a mil y Partnership, L P d/b/a Gene Carman Rea l Estate and Auc tion, Gene Car man d/b/a Gene Carman Rea l Estate and Auction, Gene Carman, a nd Ba rry Wit cher are ref err ed to as the “ Carman a ppellees.” )

Gene Carman ha s been a

real t o r an d auctionee r since 1960. A t the time of the sale of the subject p r o p e rty

G e n e Ca r ma nw a s a s o le p r o p r ie to r

o f G e n e Ca r ma nRe a l E s tate an d

A u c ti o n. B arr y Witc he r h a s b e e n a

re a lto r sin c e 19 77 and

an a g e nt a

nd br ok e r w ithGe ne Carm an Re a l E state and Auc tion since 1978. The Tuc kers hire d Gene Carman Real Estate and Auction to adver tise and sell 137.91 acr es in 25 trac ts at absolute auc tion on May 8, 2004.

Mr . Wit c he r c on ta c te d M r. Coo k a nd inf or me d h im o f t

he a va ila bil ity of th e pr op e rt

y containing the spring and its a lleg ed output. Ac cording to Mr

. Cook, Mr . Wit cher said that the spring had bee n tested and pr oduced 33,000 g allons of wate r per hour. Mr. W i t ch er re p o rt ed that he previ o u s ly

h e ar d th is s tate me n t w h il e h e w a s at t h e T u c k e r ’ s f

ar m g a th e r in g in f

o r mati o nf o r the adver tisement for the a

uction. This information was supposedly supplied to Mr. Wi tche r b y the Tucke r’s son Micha el in the pre sence of Mr. Tucke r. Michae l was the initiator of the sa le of the la nd
and the pe rs on wh o co nta c te d Ba rr y Witc he r o n b e ha lf

of his pa re nts . M ic ha e l r e pr e se nte d h ims e lf7

as the spokesma

n and as a cting on behalf

of his pare nts.
Af te r b e ingc on ta c te d by B arr y Witc he r a nd pr ior to t he sa le , Joh n Co ok

dr ov e to t he pr op e rt y and told Mr. Tucke r that he would “like to se e that spring that was putting out 33,000 g allon[s] an hour.” In response , Mr. Tucke r drove Mr. Cook to look at the spring ; it was cover ed that day

. Mr. Cook did not remove the cove r, looked a round, but took no further action to inspect the spr ing.

The Car mans promoted the a

u cti on with a written a dvertisement. The adver tisement inclu d e d a s tate me n t t

h a t “ o n e tr a c t f

e a tu r e s ana b u n d an t s p r in g ( r e p o rte d ly me a s u r e d

a t 3 3 , 0 00 g a llo ns pe r hou

r out pu t! ). ” Th e a dv e rt ise me nt al so sp e c if ic a lly dis c la ime d tha t “ any ann ounc e me nts made da y of sale ta ke pre cede nce ove r any

adver tising.” On May 8, 2004, Mr. Cook attended the auction and purcha sed approx imately 18 individual trac ts for sale f

rom the Tucke rs’ fa

rm. At the auc tion on t h at date, a handbill announce ment was distributed reg arding the auction and Mr. Cook picked up a copy of this. The handbill included the fo llo wi ngstate me nt:

I NSPECTI ONS: We invit e & encour ag e y ou to perfor m any t y pe of ins pe c tio n th a t y ou

wo uld de e m ne e df

ul p ri or to t he s ale . Thi s proper ty is being sold “ AS I S - W HE RE I S” I N I TS PR ESENT CONDI TI ON.

The handbill also included a statement informing buy ers of the re strictive cove nants that wer e being attache d to the land upon sale of the lots. I ncluded within that lang uag e wa s the statement that “[t] his property

is being sold for sing le family residenc es only .”

Acc ording to Mr . Cook, during biddingat the auc tion Gene Car man ag ain announc ed the de sc ri pti on

of the spri ng as prod

uc ing33 ,0 00 g a llo ns of

wate r p e r h our a s th e tr a c t w a s b e ingbid up on . RD po int s o ut that John and Cla ra Tu c ke r w e re pr e se nt at th e a uc tio n a nd ma de no e ff

or t to
corr ect Ge ne Carma

n’s incorr ect state ments. RD also points out that there is further suppor t in the
rec ord that the appellee Tucker s wer e aware of the use of the $33,000 g allon per hour output in an eff ort to market the la

nd. Acc ording to Carman and Wit ch er , t he Tuc kers kne w of its use in the adver tisements and wante d it communicated to Mr. Cook.

V. TC P A C lai m
RD’s ca use of a ction under the TCPA is subj ect to the one -y ear statute of limit a ti o n s p r e s c r ib e d

b y T e n n

. Co d e A n n

. § 4 7

- 1 8

- 1 1 0

. RD d is c o v e r e d th e mi s r e p r e s entation g iving r ise to this claim approxim ately 30 day s after

closing on the prope rty . The sale occur red on May 8, 2004.

R D d i d not file its action for violation of the TCPA ag ainst Gene Carman Rea l Estate and Auction until June 13, 2006, almost two y ear s afte r discovering what it c laims w as the al l eg ed misrepre sentation. Appellant RD did not file its action for violation of the TCPA ag ainst Mr. Carm an an d Mr. Witc he r u nti l Ma rc h 1 5, 20 07 - a lmo st thr e e y e ars a ft e r d isc ov e ri ngwh a t it c la ims8

was the a lleg ed misrepr esentation.
RD say s it did not fully lear n of t he mi srepr esentations until it took the deposit ion of John and Clara Tucke r in April 2006 and, thus, ca n rely on the discover

y rule. RD conte nds that it was only then did it lear

n that the Tucke rs wer e claiming not to be the source of the false information and that the Carman de fenda

nts acted on the ir own to make the false misrepre sentations. The a ssertion is untenable.

Mr. Cook knew of the adver tisements and verbal assertions reg ardingthe 33,000 g allon per hour output in May

2004. He kne w by

J uly 2004 that these a ssertions wer e dec idedly not true and that his company

was damag ed. F urthermor e, he kne w the sourc e of the se stat em ents was the Carman de fenda

nts, the Tucker s or both. He c annot re ly on the discover

y rule to extend the one-y ear statute of limitations.

Un de r t he dis c ov e ry ru le , the c a

us e of a c tio n a c c ru e s and

the statut e of

lim itatio ns be g ins to
ru n w he n the inj ur

y oc c ur s or is disc ov e re d o r w he n, in t he e xer c ise of

re a so na ble dil ig e nc e , it

sh ou ld have be en discove red. The above r easona ble dilige nce a lso ex tends to the identification of the tortfea sor. Te e te r v . Cu rry , 51 8 S.W. 2d 51 2, 51 5 ( Te nn . 1 97 4) ; Do e v . Ca tho lic Bi sh op for Di oc ese of M e mp his , 2008 WL 4253628, at *4-5 (T enn. Ct. App. Sept. 16, 2008). Se e als o S c hm an k v . S on ic Au to I ns

. , 2008 WL 2 0 7 8 0 7 6 , at * 2 - 5 (Tenn. Ct. App. May 16, 2008) (e x tended discussion of discovery rule, its para

meters, a nd application to TCPA claim).

Her e ther e is no question that Mr. Cook knew of the i njury in the S ummer of 2004, a nd either knew the sour ce of

the fa lse information or wa s on inquiry notice as to the sour ce. VI. Intentional Misreprese ntation The Supreme Court of Tenne ssee de scribes the cause of ac tion for intentional mis re pr e se ntatio n a s f

oll ow s:
I n order to prove a

claim base d on fra

udulent or intentional mis re pr e se ntatio n, a

pla int if f m us t sh owthat: 1) the de fe nd ant m a de a

re pr esen tat io n o f a

n e xistin g or

pa st fac t ; 2 ) t he re prese ntation was fa lse when ma de; 3) the
re pr e se ntatio n w a s in

re g ard to a ma te ri a l f

a c t; 4 ) t he fa lse
re pr e se ntatio n w a s ma de e ith e r kn ow ing ly or wi tho ut be lie f i n its truth or reckle ssly ; 5) plaintiff re as o n ably relied on the mis re pr e se nte d ma

te ri a l f a c t; 6 ) p la int if

f s uf fe re d da ma g e a s a result of the misre prese ntation.

W alker v . Sunrise Pontiac-GM C Truck , 249 S.W .3d 301, 311 (Tenn. 2008) . See T.P.I . - Civil § 8.36.

The a bove is sometimes aug mente d b y p r in c ip le s o f

misre prese ntation by

conce alment which is s ta te d a s: 1. Th e de fe nd ant c on c e a le d o r s up pr e sse d a ma te ri a l f

a c t;1

RD asserts that it was inappr opriate f or the c ourt to g rant pa

rtial summary judgme nt as to a portion
o f a c l ai m , ci t i n g National Found v. M.R . Dillards , 1989 WL 153880, at *8 (Te nn. Ct. App. 1989.) The a pplicable r

ule, howeve r, allows a partial summary judgme nt a s to part of a claim. Tenn. R. Civ. P. § 56.02. Se e Ro ge r V

as se lin v . M

arrio tt I nte rn , 2006 WL 2038291, at *2-3 (M.D . Cal. J uly 19, 2006.)
9

2. The de fenda

nt was under

a duty to disclose the fa ct to the plaintiff; 3. The de fenda

nt intention ally

conce aled or

suppressed the fac t with the intent to deceive the plaintiff; 4. The plaintiff w as not awa re of the fac t a

nd would have a cted differ ently if the pl aintiff knew of the c oncea led or suppre ssed fac t; and 5

. As a r e s u lt o f th e c o n c e a lm e n t o r s u p p r e s s io n o f th e fac t, the plaintiff sustained dama g e.
T.P.I

. - C ivil § 8.38. Se e Bo dy In v . v . Co re So v e nts , 2 00 7 WL 21 98 23 0, a t *6 (T e nn . Ct . App . July 26, 2007.) On appe al of this issue the Court fac es an unusual nuisance : the trial judg e did not dis mis s the i n te n ti o n a l m is r e p r e s e n tati o nc a u s e o f a c ti o n

. In s te a d , th e tr ia l j u d g e r u le d th a t t h e c a u s e of action could only

be supported by

rec klessness. The judg e found, b y wa y of g ranting partial
su mma ry jud g me nt, that a s a

ma tte r o f l aw RD ha d fa ile d to sh ow that the a lle g e d f a lse state me nts
wer e “know ingly” or “ willfully ” fa lse.

The Court finds that the trial c ourt wa s co rr ec t in the ruling but not for the re asons articulated. An appellate court may aff irm a judgment on differ ent grounds than those r elied upon by the trial cour

t when the tria l court re ache s the corr ect r esult. Le wis v. Ne wsCh an ne l 5 , 238 S.W .3d 270, 302 n. 31 (T en n

. C t . App. 2007.) Assume for the sake of argument that there was 1 proof of willfulness or of a

knowing false statement, this claim still fails as the f act s clea rly show that RD will be unable to prove relianc e. RD cannot pre vail on this claim beca use it failed to establish that it “re asonably relied” upon repr esentations by

these de fenda

nts. I n So lom on v

. Fi rst Am e ric an Ba nk of N as hv ill e , 774 S.W .2d 93 5, 94 3 ( Te nn

. Ct. Ap p. 19 89 ), thi s Cou rt state d, “ [G]e ne ra lly , a pa rt y de a lin g on e qu a l te rm s w ith
ano the r i s no t ju sti fi e d in re lyingup on

re pr e se ntatio ns wh e re the me ans of kn ow le dg e are re a dil y within his reach.”

J udg e F ranks, spe aking for this Court, has recently explained this rule in an analog ous fac t situation. To prove f raudulen t misrepre sentation, plaintiff must show that th e re wa s an in te nti on a l mi sr e pr e se ntatio n o f a m a te ri a l f a c t, made with knowledg e of its fa lsity or re ckless dis reg ard for i ts truth.10 H il l v

. J o h n B a n ks Buick , 875 S.W .2d 667 ( Tenn. Ct. App. 1993). Th e e viden ce e sta

bli sh e s a dis pu te d is su e of

ma te ri a l f

a c t a s to wh ether the financ ing w as “c omplete and available” under the conditions e x isting betwee n KRI and Century at that t i m e. I f, ho we ve r, a

mis re pr e se ntatio n w a s ma de in t his re g ard , A lli e d mu st pr ov e tha t it re a so na bly re lie d u po n th e mis re pr e se ntatio n to it s detriment. Id. I n o rd e r t o d e te rm ine wh e the r p la int if f’ s r e lia nc e up on Da vis ’ statements was r easona

b l e, seve ral fa ctors must be consider ed, including “ the plaintiff’s business expertise and sophi stication,” the

“ a va ila bil ity of the rele va

nt i nf or ma tio n” and

“ the op po rt

un ity to discover the fra

ud.” City State Bank v. De an W itte r Rey nolds, Inc., 948 S.W .2d 729, 737 (Tenn. C t

. Ap p

. 1996). In this reg ard, L ink admits that he was g iven the name and number o f the per son at Century Financ e with whom the def endants ha d been dealing , and
wa s in vit e d to c all and get m or e inf or ma tio n. L ink

did sp e a k w ith Lunderg an at Century

Financ e, and a ccor ding to L ink, he was a dvised that Century Financ e had been se lected a nd that Lunderg an would be ha nd lin g the le a se . L

un de rg an a lso tol d L ink

to send his in vo ic e s, and they would be paid. L ink also acknow ledg ed that he r ece ived a purcha se orde r fr om Century on April 21 which stated that other documents we re r equire d from KRI in connec tion with the lease, but did not inquire as to what those doc uments were

. The purcha se orde r specific ally

states in two place s that other docume nt must be executed by KRIon or bef

ore a cer tain date, or

the purc hase order is “null and void.” F r o m t h e u n d i s p u t e d m a t e r i a l e v i d e n c e an d L i n k ’ s t e s t i m o n y, we c onclude that plaintiff’ s relianc e on Davis’ sta t em ent was
unrea sonable g iven the fa ct that plaintiff was put on notice at lea st by Ap ri l 21 tha

t th e re we re so me c on di ti on s on the le a se , a

nd sh ou ld
rea sonably

have inquire d as t o what those c onditions were. Plaintiff had the mea

ns to obtain the information nee ded an d discover a ny

“ fr a ud ” if he ha d simp ly a sk e d Cen tur y fo r a c op y

of the a c tua l le a se ag ree ment or inquired a s to wh at additional documentation wa s require d by

Century befor e continuing the per formanc e. While L ink assents that he had never been involved in a lease transac tion before , he wa s an experienc ed business per son, and on t his recor d is charg ed wi th k no wi ngthe re we re c on tin g e nc ie s to be me t by a c e rt a in date in
c on ne c tio n w iththe le a se . Wh e re inf or ma tio n is re a so na

bly dis c ov e re d, and

he re wh e re the pla int if

f w a s in vit ed to inq

uir e , it
c an n o tc l a i m r e a s o n a

b l e r e l i an c e u

p o na m i s r e p r e s e n t a t i o n

. In So lom on v . Firs t Ame ric an Nat ion al B an k of N as hv ill e , 774 S.W .2d 93 5 (Ten n. Ct. Ap p. 19 89 ), thi s Co ur t st a te d, “ [G]e ne ra lly , a

pa rt y dealingon equal ter m s with another is not justified in relying upon
re pr e se ntatio ns wh e re the me ans of kn ow le dg e are re a dil y

wi thi n h is11 rea ch.” The trial court also found that plaintiff’s relia n ce on statements m ade by Nee ly and Davis at the May

4 meeting (that the money was s e t t o c o me in a t t h e e n d o f c o n s tr u c ti o n ) w a s n ot
rea sonab l e b ecause plaintiff ha d been f ound to have notice of the letter of c redit re quireme n t

. Al lied conce des that it is bound by the previous ruling that it had notice of the letter of cre dit requireme nt by May 4, but argues that L ink was not told that KRI had applied f or a letter of cre dit at se vera l dif fer ent banks and be en turne d down. L ink did no t, h ow e ve r, inq

uir e of Ne e ly or Da vis a bo ut t he le tte r of

c re dit require ment, or whe ther the continge ncies in the lea se had be en fu lf ill e d, e ve n th ou g h h e was char g e d w ithkn ow ingof bo th conditions a t that juncture. L ink conce des he should not have g one forwa rd with the work know ing that a conting ency exis ted. Pla int if f’ s a lle g e d r e lia

nc e on de fe nd ants ’ s ta te me nts [wa s]
u n r e a s o n a

b l e , an d w e f i n d s u m m ar y j u d g m e n tt o b e a

p p r o p r i a t e

. In order to defe at s ummary judgme nt, the re asonable ness of the r eliance must amount to a ge nuine issue, [w hich is] not found her e. See An na c o, In c . v . Co rb in , 1998 WL 929637 (Tenn. Ct. App. 1998).

Al lie d S ou nd , I nc . v . Ne e ly , 58 S.W .3d 119, 122-123 (Te nn. Ct. App. 2001).

Her e Mr. Cook a ctually went to the spring but only observe d. He was ag ain invited to inspect the spring but did not. Mr. C ook was knowle dg eable in the commerc ial development of spring s. The

sp ri ngwa s at the ve ry c or e of thi s sal e , y e t Mr. Coo k fa ile d to c los e ly ins pe c t it or me a sure its ou tput.
Whe re the me ans of

inf or ma tio n a re a t ha nd and e qu a lly a c c e ssi ble to both parties so that, with ordinar y prudenc e or dilige nce, the y might rely on their own judgme nt, ge nera lly they must be presumed to have done so, or, if they have not infor med themselves, they

must abide the conseque nces of

their own in attention and ca rele ssness. Unless the repr esentations are suc h as ar e ca lculat ed t o l ull the suspicions of a
c are fu l ma

n in to a c omp le te re lia

nc e the re on , it is c omm on ly he ld, in the abse nce of

specia l circumstanc es, that, where the means of knowledg e ar e re adily

available , and the ve ndor or pur chase r , as the
c a se may be , h a s th e op po rt

un ity by inv e st igat ion or

ins pe c tio n to discover the tru t h with respec t to matters conce aled or
m i s r e p r e s e n t e d , w i t h o u tp r e v e n t i o no r h i n dr an c e b y t h e o t h e r

p art y, of which oppor

tunity he is or should be a

war e, and w here he
never theless fa ils to exercise that opportunity and to discover

the truth, he ca

nnot there afte r assa il the validity of the c ontrac t for fr aud,
m i s re prese ntation or conc ealment with re spect to matters w hich should have be en asc erta ined. . .12

W instead v. First T

ennesse e Bank, 709 S.W .2d 627, 631 (Tenn. Ct. App. 1986). Se e als o D an ie ls v. Basch , 2005 WL 2860177, at *5-6 (T enn. Ct. App. Oct. 27, 2005.)

Whil e we may

qu es t i o n t h e ef

fi cienc y of dissecting a ca

use of a ction by

the g ranting of a partial summary

judgme nt in the m anner here in, we do not find the judg ment of the trial judg e to be
e rr on e ou s.
VI I. Ne gli ge nc e Cl aim

The trial c ourt dismissed RD’s separately pled neglig ence claim ag ainst appellee s as being duplicitous of the neg lige nt misreprese ntation claim. I ndeed, the o n l y b as i s for the purported neg lige nce c laim ag ains t T ucker defe ndants stated in the sec ond amende d complaint was that the defe ndants alleg edly

brea ch e d a “ duty by neg lige ntly

repr esenting the flow of the spring in question.” Thus , th e on ly

ne g lig e nt a c t a lle g e d agains t th e Tu c ke r d e fe nd ants wa s th a t th e y purp or te dly
n egl i gen t l y

m i s re p re s en t edt h e f

l o w o f t h e s p ri n g.
I t is clear that t h is claim is duplicitous to the neg lige nt misreprese ntation claim. The trial judge acte d corr ectly

in dismi ssing it. The two c auses of action have the same ly

nchpin theory

of liability and ar e thus duplicidous. 61 Am.J ur.2d Plea d ing § 53 (duplicitous pleading s). Fur thermore , and more importantly , the neglig ence claim is subject to dismiss al under the ec onomic loss doctrine. AmSouth Erec tors v. Skaggs Iron W orks , 2003 WL 21878540, at *4 (Tenn. Ct. App, Aug . 15, 2003); Un ite d Te x til e W or k e rs a nd Le ar Sie gle r S e ati ng Cor p , 8 2 5 S

. W

. 2 d

8 3 ( T e n n

. C t

. A p p

. 1 9 9 0 )

. In any event ther e is no prejudice to appellant RD, as the tr ial judge did not dismiss the neg lige nt mis re pr e se ntatio n c la im.

VI II. F r ust r at ion of P ur pos e
Th e do c tr ine of

fr us tr a tio n o f p ur

po se on ly a pp lie s in c a se s o f t he mos t e xtre me hardship whe re the re ha s been a n unanticipated circ umstance that, under the equities at play , justify placingthe risk of avoidance of the c ontrac t on the party not claiming f

rustration of pur

poses.
The question in c ases involving frustration is whether the e quities of the ca se, consider ed in light of sound public policy , require placing the r is k o f a d is r u p ti o no r c o mp le te d e s tr

u c ti o no f th e c o n tr act eq u i l i brium on defe ndant or plaintiff unde r the c ircumstance s of a g iven ca se (c itations omitted) and the answe r depe nds on whether an un anti c ipate d c ir c ums tanc e , th e ri sk of w hich sh ou ld n ot b e fa ir ly thrown on the promisor, has made perf ormanc e vitally

differ ent from wh a t w a s r e a so na

bly to be e xpe c te d.

. . Th e purp os e of a c on tr a c t is to place the risks of performanc e upon the promisor, and the relation of the parties, terms of the contra ct, and circ umstances s u rrounding its fo rm a tio n mus t be e xami ne d to de te rm ine wh e the r it c a n b e fa ir ly inferr ed that the r isk of the eve nt that has superve ned to ca use the alleg ed fr

ustration was not re asonably fore seea ble. I f i t was13 fo re se e a ble , th e re sh ou ld h a ve be e n p ro vis ion fo r i t in the c on tr a c t, and the a bsence of such a

provision give s rise to the infer ence that the risk was a ssumed

.
Nor th A me ric an Cap ita l Co rp orati on v . M c Can ts , 510 S.W .2d 901, 903-904 (Te nn. 1974).

The doct ri ne is discussed in detail in Fa rnsworth, Fa rn swo rth on Con tra c ts § 9.7 et seq. (2 00 4

. ) T h e d o c t r i n e , w h e n a p p l i e d , h a s b e e n i n v o k e d t o n e g a t e c o n t r a c tu a l o b l i g a tio ns in circ umstances wher e unanticipated events, like ne wly -ena cted r egulation or illness of a per formanc e i n t er fer e with expectations. Among its requireme nts is that “the frustration must have r esulted without the fault of the party seeking to be excused.” Fa rn swo rth § 9.7 at 652-53. He re w e have alre ady deter mined that the party did not rely on the alleg ed misrepr esentation through Mr . Cook’s inaction. Addit ionally , both parties must share the basic assumption that is frustrated. Id. Sin c e RD contends that he was purpose ly or neg lige ntly

misinformed about the output of the springthen clea rly both parties did not share the s ame assumption. And finally , the application of the doc trine is one of law f

or the c ourt, Id. , and we are not constrained to sa y that the cha

ncellor’ s ruling w as without his di scre tion. The ab o ve discussion with ref ere nce to Fa rn swo rth is consistent with the principles stated by

Chief J ustice Dy er in Mc Can ts. The trial judg e committed no er ror in dismissing the c laim for fr ustration of purpose

. IX. Summ ary Judgm ent P roce dure

RD ha s a sse rt e d a s e rr or

the fa c t th a t th e tr ia l ju dg e c a lle d s e ve ra l w itn e sse s to testify at the hear ing on the summary judgme nt motion. This Court ag ree s with RD that this action
wa s ir re g ula r. On e pr ior

c a se ho lds :
A s to th e is s u e o n e , E JCE c o n te n d s th a t th e tr ia l c o urt err ed in permitting testimony

from live witnesses on behalf of Ray burn, over obje ction of counse l for the EJCE, during ora l argument on Ray burn ’s mot ion for su mmar y jud g me nt. We m

us t a g re e and

wi ll dis re g ard a ll o ra l pro of

fo r p ur po se s o f r e vie wi ngthi s c a se . [T e nn . R. Civ . P. 56 .0 3] c le arl y

state s th a t th e Cou

rt is to us e “ ple a din g s, depositio n s , answe rs to interrog atories, a nd admissions on file, toge ther with the a ffidavits, if any ,” to deter mine whether

the g ranting of a mot ion fo r s umm ary

jud g me nt i s p ro pe r. Th e re is n o me nti on in thi s Ru le of

the us e of te sti mony

of liv e wi tne sse s b e c a

us e the Rul e s i mp l y d o es n o tp er m i tt h at k i n d o f p ro o f i nt h i s t y

p e o f h ea ri n g. Ev c o Corp . v. Ro ss, 528 S.W .2d 20 (Tenn. 1975). Should we allow oral testimony

to be taken dur ing he aring s on motions for summary judgme nt, it would li kely turn these he aring s into “mini trials.” The purpose of

Rule 56 is “to provide a quick, inexpensive means of concludingcase s, in whole or part, upon issues as to which ther e is no g enuine dispute re g ardingmateria l fac ts.” By rd v . H all , 847 S.W .2d 20 8 ( Te nn . 1 99 3. ) A“ min i tr ia l” of thi s ty pe w ou ld d ir e c tly2

Appellant makes ref

ere nce to this testimony in his brief, but he fails to e x plain how consider ations of thi s te sti mony

wo uld have imp a c te d th e re su lt.

14 contravene the above a

rticulat ed p urposes of Rule 56 by incre asing the le ng th a

nd , in a ll l ike lih oo d, the c os t of the se mot ion

he ari ng s. Rayburn v. E.J. Const., 2004 WL 27616, at *2 (Te nn. Ct. App. Feb. 3, 1995.) Fe dera l case law does not absolutely forbid the proce dure but does st ate that it should be done “spar ingly and with g reat
car e.” Wrig ht, Mill er & Kane , Fe de ra l P ra c tic e an d P ro c e du re , Ci v il , § 2723 at 387 (1998.)

RD , how e ve r, fa ile d to obje c t. Th e law spe c if ic a lly a dd re sse s occ a sio ns wh e n a

jud g e c a lls
a wi tne ss. TRE 61 4. Th e n, “ if c ouns e l f

a ils to o bject at all o r t o o bje c t a t th e ne xt av a ila ble
o p p o rtu n it y , th e is s u e is o f

te nd e e me d

w a iv e d

. ” Co h e n , Sh e p ar d & Pa in e, T

en nesseeLaw of Evidenc e § 614 [4] , p. 6-156 (2005). This is in ke eping with the g ener al principle that one ca nnot benef it from an er

ror to which he has not objecte d. Id. a t § 1 03 [4]; Se e als o Tenn. R. Evidenc e 103; Tenn. R. App. P. 36(a)

. 2

I n the abse nce of

the objection, the Court f inds no reve rsible err or. This Court f urthermor e has not found the live testimony at t h e s ummary

judgme nt hear ing to be dispositi ve but has de te rm ine d th is a

pp e a l on the wr itt e n r e c or d th a t w a s b e fo re the tr ia l c ourt

. X. Entry of the F inal O rder
RD asserts that it was e rror for the tr ial judge to cer

tify his judgment a s final under Te nn. R. Civ. P . 54.02 without allowing RD to objec t and be he ard. It was, of c ou rs e, appellant RD who non-suited all rema ining claims afte r the summary judgme nt r uling. The Court is hard pre ssed to see a

ny prejudice to RD or, g iven the nonsuit of the rema ining claim, what other alternative was available to the tria l judge . There was no err or under these circumstance s to the entry of a f inal order

. XI. Appellees’ Appeal

The de fenda

nts have brie fed a

nd argued their a ssertion that the trial judg e should have dis mis se d a ll o f RD’ s c la ims . T he se re ma ini ngc la ims we re no n- su ite d, and theref or e the re is nothing be fore this Court t o resolve.

CO NC LU SION

For the re asons stated a

bove, the judgme nt of the trial court is a ffirme d. Costs of this appe al
ar e t a x e d t o a p p e l l an tR D an d

i t s s u r e t y f

o r w h i c h l e te x e c u t i o nm ay i s s u e i f n e c e s s ar y.

____________________________ Walter C. Kurtz, S enior Judge