### IN THE COURT OF APPEALS OF TENNESSEE AT KNOX VILLE Ma y 14, 200 7 S es sio n

MA TTHEW FL ORY and C HRIS TI FL ORY v. JOHN AR NOL D FITZ GER

ALD

Direc t Appeal from the Chancer y Court for Rhea County No. 9989 Hon. John Turnb ull, Ch ancellor

No. E2006-02077-COA- R3-CV- F ILED MAY 30, 2007

Plaintiffs purchase d proper ty from def endant by Warranty Dee d which stated the proper ty contained 15 acr es. Plaintiffs subsequently lear ned in litigation with a neighbor over the boundary line, that the par cel only

contained 10.66 a cre s. Plaintiffs the n filed this action ag ainst defe ndant to rec over damag es and the Trial Court he ld that plaintiffs were entitled to damag es under the war ranties in the Dee d in th e a mo u n t o f $ 6
, 6 6 0

. 0 0 f o r th e s h o rta g e o f a c r e a g e p lu s c o s ts a n d th e ju d g me n t they incurre d in the boundary

line dispute with their neighbor. O n appea l, we af firm the Judgment of the Tr ia l Co ur

t.

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.

H ER SCH EL P I CKE N S F RAN KS , P.J ., delivere d the opi nion of the cour t, in which C H A RLES D. S US ANO , J R ., J ., and D. M I CH A EL S WI NEY , J ., joined.

An dr e w F . T uc ke r, Da

y ton , T e nn e sse e , f

or a pp e lla nt.

JohnR. A nd e rs on

a nd Rob e rt S. G ro t, C hatta

no og a , T e nn e sse e , f

or a pp e lle e s.

OP IN ION

Pla int if fs ’ C omp la int

a ve rr e d th a t th e y

ha d p urcha se d p ro pe rt

y fr om d e fe nd a nt i n 19 96 , w hic h d e fe nd a nt c on ve y e d to the m by War ra nty De e d, a nd that the de e d d e sc ri be d th e pr op e rt y as conta ining f

ifteen a cre s. Furthe r, that a dispute a rose in 1997 with an adjoining prope rty owner over timber r ights, a

nd a suit was filed to re solve that d i s p u t e. I n that suit it was de termined that-2-

plaintiffs only

had 10 1⁄2 ac res instea d of the 15 s et fo rt h i n the Dee d. Plaintiffs charg ed that defe ndant was g

u il ty of bre ach of

contra ct, misrepre sentation, neg lige nce, f raud by conce alment, and

v i o l a t e d t h e C o n su me r P ro te c tio n A c t. P la int if fs so ug ht d a ma g e s f

or the ir los s, pr e jud g me nt i nte re st, and attorne y ’s fe es.

Def endant’ s Answer asser

ted that plaintiffs had waived the war ranty in the deed by failing to notify

defe ndant to defe nd the dee d, and that whe n he wa s contac ted by plaintiffs about the problem, he of

fer ed to re purcha se the proper ty for the price plaintiffs had paid him, i.e., $22,500.00, but plaintiffs ref

used to allow hi m to repur chase the property . Def endant c oncluded that he never had the proper

ty surveyed and that he convey ed the pr operty using the same leg al desc ription which

wa s in the pr ior De e ds

.

The c ase w as tried on August 1, 2006, and Matthew F lory testified that he ne g otiated to purcha se the prope rty

with defe ndant, and a sked def endant a bout having a surve y

done, but de fe nd a nt w a nte d a

qu ic k s a le a nd did

n’ t wa nt a sur

ve y

. He te sti fi e d tha t the y a g re e d to pu rc ha se th e p r o p e rty

f o r $ 1
, 5 0 0

. 0 0 p e r

a c r e

. Flory offe red into e v id e n c e th e w a r r a n ty d e e d th e y r e c e ived from def endant, a nd testified that they paid defe ndant $22,500.00, which wa s ref lected in the de ed. He testified that a fter the purcha se they beg an clea ning up the proper

ty and cutting tr ees to c lear an

a re a fo r a ho us e . H e te sti fi e d th e ir

ne ig hb or a pp ro a c he d th e log g e rs a nd tol d th e m th e y

we re a c ro ss the line and we re c utting timber on his prope rty

. Flory testified that he told def

endant the ne x t day about what ha d happene d, and def endant told him the adjoining proper ty owner was c razy , and that the dee d was g ood and he w ould stand behind it.

Flory testified that they

employ ed Howar d Upchur ch to br ing an action to se ttle the boundary line dispute.

The ne x t witness w as Da vid Manser w ho testified that he pur chase d the land fr om the Flor y s, as his proper

ty adjoined that tra ct. He t estified that he of fer ed to buy

the 15 ac res, but wh e n he fo un d ou t the re wa s on ly 10
, he re du c e d his of fe r. He te sti fi e d that he wo uld hav e paid $60,000.00 for 15 a cre s.

Def endant testified that he ag ree d to sell the proper ty to plaintiffs for $22,500.00, but denied ther e wa s any

d i s cu s s i o n ab o u t a per

acr e pric e. F urther, that plaintiffs never discussed a

s u r v e y w i t h h i m , a n d

h e w a s n o to p p o s e d

t o a s u r v e y.

Def endant testified that he learned about the boundary line litigation from How ard Upchur ch, and that he immediately offe red to re- purcha se the proper ty for the w hole purc hase pr ice, even thoug h plaint i ff

s had cut timber f

rom the prope rty . He testified that he thoug ht he had to be
g ive n w ri tte n n oti c e to d e fe nd the De e d, a nd he wo uld have de fe nd e d the De e d ha d the y g ive n h im
proper notice. De fenda

nt testified that he could not re member w hen Upc hurch c ontacted him, but he knew it was befor e the surve y

was done

.

Howar d Upchur ch testified t h a t h e h a d k n o wn defe ndant since the 1970s and that they-3-

wer e fr iends. He testified that he was employ ed by the Flory s to r esolve the bounda ry line dispute,

a nd he c a lle d d e fe nd a nt a

nd de fe nd a nt g a ve him a ll the inf or ma tio n he c ou ld that he tho ug ht w ou ld help the Flory s in the ir lawsuit. He testified that he often c onsulted with defenda nt in the ear ly

stag es of the c ase.
Upchur ch testified that a fter the independe nt survey was done and it wa s clea r that th e n e ig h b o r s , Se d ma

n s , h a d a s u

p e r io r c la im to th e la

n d
, h e c o n ta c te d d e f

e n d a n t a nd asked if he would repur chase the prope rty from plaintiffs, a

nd defe ndant offe red to r epay the purc hase pr ice, but no more. Upc hurch a dmitted he never put defe ndant on written notice to defe nd.

The Tr ial Court ruled that there was a mutual mist ake of fac t, a nd that both parties thou g h t 1 5 a c r e s w e r e b e in g c o n v e y e d

. T h e Co u rt f o u n d th a t w h e n p la in ti f

f s le a r n ed about the disputed boundary
, they put de fenda nt on notice of the dispute. The court found t h at Upchur ch
contac ted def

endant at the outset, befor e sui t was filed, and then later when diff eringsurvey s cause d him c on c e rn a bo ut t he c a se . T he Court

fo un d th at ba se d u

po n h is con su lt ati on wi th d e fe nd a nt, Upchur ch ag ree d to the independe nt sur vey , and that the independe nt sur vey showed ther e we re 4 1⁄2 acr es less than what the deed c alled for

.

The Court held t here was a brea ch of the warranty in the deed f rom the def

endant a s to the quantit y of l and conve y ed, and that while defe ndant did offe r to repur chase the prope rty for the origi nal purc hase pr ice, the Court sa id that severa l y ear s had passe d at that time, and that plaintiffs wer e entitled to a r eturn o n their investment, but wer e not entitled to $3,900.00 per a cre the pr ic e pa id b y

Mans e r. Th e Cou

rt fo un d tha t dam a g e s shou ld be lim ite d to a bate me nt d a ma g e s, and that pre

judgme nt interest would not be allowe d, beca use plaintiffs ma d e a

s ig n ificant prof

it when they sold the rema ining land. The Court further held t hat pl aintiffs could also recove r the c osts of the lawsuit with the Sedmans. In the Final Judgment, the Court awa rded pla intiffs the cost of the 4.44 acr es at $1,500.00 pe r ac re, w hich amounted to $6,660.00. The Court also awarde d plaintiffs judgme nt for the c osts incurred in their lawsuit with the Sedmans, which consisted of the $2,295.00 judgme nt they

paid, the deposition costs of $530.00, and c ourt costs of $414.00. The Court denied
pr e jud g me nt i nte re st.

De fe nd a nt a

pp e a le d a nd the pa rt ie s r a ise d th e se iss ue s o n a pp e a l:

1. Whe ther the T ri a l Co ur t e rr e d in a wa rd ingdama g e s to pla int if fs on the ir br e a c h o f w a r

r a n t y c l a i m , w h e n d e f

e n d a n t n e v e r h a d t h e o p p o rtu n i t y to defe nd the title reg ardingthe ac rea ge co n v ey ed in the prior bounda ry line dispute?

2. Whether re scission of contra ct is the proper reme dy for a mutual mist ake wh e n th e se lle r o ff

e re d to re fu

nd the purc ha se pr ic e in f

ull ?

3. Whe the r p la int if

fs sh ou ld h a ve be e n a

wa rd e d p re jud g me nt i nte re st?-4- 4. Whether plaintiffs should be a war ded d am age s for the filing of a frivolous

a pp e a l?

Def endant a rg ues that it was er

roneous f or the Trial Court to awar d damag es, whe n de fe nd a nt w a s n ot a sk e d to de fe nd the tit le in t he bo un da

ry lin e dis pu te be tw e e n p la int if fs a nd the ir neig hbors, but cites no authority for his position. Defe ndant s i m p ly argues that if he ha d been broug ht into the boundary line dispute and could ha v e s h o wn the surveyor the prope r points of

re fe re nc e , th e ou tc ome of that di sp ute wo uld

have be e n d if

fe re nt. Thus he a sse rt s th a t pl a int if fs ’

c la im i s “ sta le ” , s ug g e sti nga de fe ns e in t

he natur e of

wa ive r/ la c he s.

Def endant doe s not address t he fa ct that he wa s made a war e of the boundary

line dis pu te be fo re the la

ws uit wa s f ile d, a nd c ou ld h a ve a sk e d p la int if fs a nd the ir a tto rn e y to j oin him

a s a par ty , or co uld have so ug ht int e rv e nti on on his own, or c ou ld h a ve sim

ply te sti fi e d in

the laws uit

re g a rd ingwh e re he a lle g e s th e pr op e r b ound a ry lin e to b e . D e fe nd a nt d id no ne of th ese thing s, de sp ite havin g kn ow le dg e of the laws uit

fr om i ts i nc e pti on , a

nd de sp ite be ingin c on su ltatio n w ith Mr. Upchur ch about the dispute on nume rous occ asions. Def endant does not cite the Court to any

a uth or ity that re qu ir e s the se lle r of the pr op e rt y to be br ou g ht int o a subs e qu e nt bou nd a ry lin e dis pu te be tw e e n the purc ha se r a nd a n a djo ini ng pr op e rt y ow ne r, in or de r fo r the purc ha se r to “ pr e se rv e ” his claim ag ainst the seller for a shortag e of acr es purcha sed. Any claimed waiver or lac hes would be applicable to defe ndant’s ac tions as well, since he had notice of the di s p u t e o v er the proper ty and believed that the proper

ty contained f

ifteen a cre s.

Plaintiffs rely on the case of Moore v . Teddleton, 2006 WL 3199273 (Tenn. Ct. App. No v. 7, 20 06 ), wh e re thi s Cour t hel d in a bre a c h o f w a rr a nty a nd mis re pr e se ntatio n a c tio n a g a ins t the se lle r o f t

he pr op e rt

y that the se lle r wo uld be a pr op e r p a rt

y , b ut w a s n ot a

n in dis pe ns a

ble pa rt y to t he bo un da

ry lin e dis pu te . We state d in tha t c a se tha t w hil e the se lle r w a s a ff

e c te d b y the ou tc ome of the pr e vio us su it, he a nd the Mo or e s had a n ide nti ty of int e re sts , a

nd thu s h is i nte re sts in t

he same

wer e repr esente d by the Moores. This Court c ited to 11 C.J .S. Bo un da rie s §110 (2006), whic h states that a prior ow ner is not a ne cessa ry par t y t o a boundar

y line dispute, but may

proper ly join and
prosec ute the ac tion if he wishes and ha s ag ree d to do so. Id. at 7.

I n this case, de fenda

nt was not an indispensable party who was require d to be joined in the boundary line dispute, beca use he had an identity of i ntere st with plaintiffs in that liti g ation. Def endant c ould have soug ht to join i n th e s u i t i f h e h ad desired, but he did not. The Trial Court
pr op e rl y a llo we d th e pla int if

fs ’ c la ims to p ro c e e d a g a ins t th e de fe nd a nt.

Next, defe ndant arg ues t hat pl aintiffs were lim ited to the remedy of re scission, due to the fac t that a mutual mistake occ urre d, and he had offe red to re fund the purc hase pr ice. Plaintiffs rely on Mi lls v . B ro wn , 568 S.W .2d 100 (Tenn. 1978) , wher ein the purc haser s of land sued the seller, claiming a shortag e in the ac rea g e purc hased due to a mutual mistake, and t h e S u p reme Court allowed their

claim. The B rowns had p u rc h as ed a tra ct of land f rom the Tallents, whic h they believed to contain at least 160 acr es, for the price of $100.00 per a cre

. Id. Th e B ro wn s late r s old this same tract t o the Mills for $137.50 per a cre

. Id. A subsequent survey perf ormed in conne ction-5-

with the sale re vealed t hat the tra ct only contained 122.5 a cre s, and the Mills sold the tract for $24,500.00, which was $200.00 per a cre

. Th e purc ha se r w ou ld h a ve pa id t he Mil ls $ 32 ,0 00 .0 0 if the trac t had containe d 160 acr es. Id.

The Mil ls then broug ht an ac tion for the def iciency in acr eag e, and the seller de nied that the M ills wer e entitl ed to relief

. The Trial Court and this Court ag ree d, appar ently beca use the plaintiffs had not g iven their ve ndors an oppor tunity to rescind t h e t ransaction, and bec ause the plaintiffs had proc eede d with a sale of the prope rty

and made a prof

it from the transa ction. Id. The Supreme Court disag ree d, and found that the proper ty values wer e incre asing during the time that these tra nsactions took place , and that the fact that the pl aintiffs had sold the pr operty for more than they paid for it was not dete rminative. Id. The Court stated, “ele ction of reme dies, howeve r, in the

case of a pur chase r of pr operty who has be en dama g ed by mutual mist ake, lies w ith the purcha ser, not with the vendor”
, and plainti ffs did not have to see k resc ission, but could seek abatement of the purcha se price , which wa s the usual re medy in a ca se whe re the re w as a shor tag e of a cre ag e fr om a sale by the ac re, due to mutual mis take. Id. at 102.

The Court held that the Mills sale of the proper ty did not abrog ate their rig ht to sue their vendor s for damag es. The Court stated that r escission was “ but one of a number of r emedies available to the purcha ser.” Id . at 103. The Court we nt on to ex plain:

I n the pre sent ca se the pe titioners did not seek to avoid or set aside the transa ction, b u tcl ai m edan ab at em en to f t h e pu rc h as e pr i ce b ec au s e of a sh o rt age i n t h e a cr ea ge convey ed to them. Thi s is one of the well-settled reme dies ava ilable to a purc haser of land by

the acre
, an d we do not find that the pe titioners have take n any action inconsistent with their right t o pursue it. S uch an a ction is based upon an e lection by the purc haser to aff

irm the t ransa ction, not to avoid i t. We are not familiar with any authority which re quires the pur chase r, in o rd er to avail himself of an a ction for damag es, to fore g o any

economic a dvantag e which ma y h av e acc rued to him by i n c r e a s e i n m a r

k e tv a l u e o f

t h e p r o p e rt y.

Id. at 103.

Acc ording ly , we c onclude that plaintiffs he rein we re not limited to the remedy of

resc ission, but could elect to pursue their damag e claim ag ainst the defendant for abate ment of the purcha se price , as we ll as other incidenta l damag es. Se e als o R ho de s v. Hil de br an d Co . R e altor

s , 19 85 WL41 37 (T e nn . Ct . App . D e c . 5 , 1 98 5) . T his iss ue is a lso wi tho ut m e ri t.

Prejudg ment interest is discre tionary with the trial court, and the trial cour t’s decision should not be reve rsed a

bsent an a buse of that discr etion. See, Otis v

. Cambridge Mut. Fire Ins. Co.
, 80 5 S. W.2 d 43 9 (T e nn

. 19 92 ). Th e Tr ia l Co ur t f ou nd that pl a int if

fs ha d r e c e ive d c on sid e ra

ble pr of it from their sale of the land to Manser , and on that basis denie d prejudg ment interest. We hold the Court did no t a bu se its dis c re tio n in

dis a llo wi ngpr e

jud g me nt i nte re st.-6- Plaintiffs arg ue they should be awarde d damag es for defe ndant’s fili ng of a f rivolous
appea l. Whi le def

endant f ailed to c ite any controlling case authority in suppor t of his arg uments on appea l, he foc used on fa ctual dis putes, and we conclude that this is not a prope r ca se for the imp os iti on

of sanc tio ns fo r f

ri vo lou s a pp e a l.

We affir m the J udg ment of the Tr ial Court and re mand, wit h the cost of t he appe al assessed to John Arnold Fitzger ald.

______________________________ H ER SCH EL P I CKE N S F RAN KS , P

. J.