IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE

February 27, 2015 Session

TERRY PRITCHETT V. COMAS MONTGOMERY REALTY & AUCTION

COMPANY, INC. ET AL.

Appeal from the Circuit Court for Rutherford County

No. 63540 Robert E. Corlew, III, Judge

No. M2014-00583-COA-R3-CV – Filed April 15, 2015

Plaintiff purchased a commercial building at auction. After determining that the building 

was smaller than represented in the auction advertisements, Plaintiff filed suit asserting a 

claim against the auction company for negligently misrepresenting the square footage of 

the building. Defendant admits the advertisement incorrectly stated the square footage but

insists it is not liable because, prior to the auction, Plaintiff signed a “Terms of Sale” 

agreement stating that Plaintiff “shall rely entirely on [his] own inspection and 

information,” and that “[e]verything will be sold „AS IS, WHERE IS‟, with no guarantee 

of any kind, regardless of statement or condition made from the auctioneer,” and the 

same terms were restated immediately prior to the commencement of bidding. Defendant 

further relies on the contract of sale, which included the “as is” clause and did not contain 

a representation concerning the square footage of the building. After engaging in 

discovery, Defendant filed a motion for summary judgment, arguing that Plaintiff could 

not have justifiably relied on the representations in light of the “as is” disclaimers he 

signed and heard, and that Plaintiff failed to establish the applicable standard of care. The 

trial court granted summary judgment for Defendant, which Plaintiff contends was error.

We have determined that Plaintiff‟s agreement to rely entirely on his own inspection and 

information and to purchase the property on an “as is” basis negates any reliance on 

Defendant‟s representation, which is an essential element of a claim for negligent 

misrepresentation. Therefore, we affirm the grant of summary judgment in favor of 

Defendant.

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

FRANK G. CLEMENT, JR., P.J., M.S., delivered the opinion of the Court, in which 

RICHARD H. DINKINS and W. NEAL MCBRAYER, JJ., joined.

Christina Duncan and J. Stanley Rogers, Manchester, Tennessee, for the appellant, Terry 

Pritchett.
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Aaron S. Guin, Nashville, Tennessee, for the appellee, Comas Montgomery Realty & 

Auction Company, Inc.

G. Sumner Bouldin, Jr., Murfreesboro, Tennessee, for the appellee, BGS Limited, a 

Tennessee Limited Partnership.

OPINION

In March 2010, Comas Montgomery Realty & Auction Company, Inc. 

(“Defendant”) conducted an auction of a commercial building on behalf of the property 

owner. Terry Pritchett (“Plaintiff”) attended the auction due in part to advertisements 

circulated by Defendant, which stated that the building to be auctioned contained 11,556 

square feet.1

On the day of the auction but prior to its commencement, Plaintiff signed a 

“Terms of Sale” form that stated “[e]verything will be sold „AS IS, WHERE IS‟, with no 

guarantee of any kind, regardless of statement or condition made from the auctioneer. 

Buyer shall rely entirely on their own inspection and information.” Additionally, 

immediately prior to the commencement of the auction, Defendant‟s auctioneer

announced to those in attendance that “[y]our bids today are based solely upon your 

inspection. This real estate‟s being sold without physical warranty in as-is condition.”

After making this announcement the auction commenced.

At the conclusion of the auction Plaintiff was recognized as the successful bidder,

and he signed the contract of sale. The contract states in pertinent part that the parties 

agreed “that this instrument contains the entire agreement between the parties and that

acceptance herein notes that there are no oral or collateral conditions, agreements or 

representations, all such having been incorporated and resolved in this Contract.” The 

contract additionally states “[b]uyer specifically acknowledges herein that the property is 

being purchased „as is‟ and that neither the Seller nor [Defendant] makes any warranties 

or representations, express or implied, as to the habitability or condition of the real 

property contained herein.” Furthermore, the contract of sale does not contain a 

representation concerning the dimensions of the building. 

After acquiring the property, Plaintiff determined that the building comprised 

9,353 square feet rather than 11,556 as advertised. As a consequence, Plaintiff

commenced this action against Defendant alleging that it negligently misrepresented the 

 

1 Defendant relied upon a 2008 Retrospective Valuation Self-Contained Appraisal Report 

(“Appraisal Report”) prepared by Crook & Company appraisers that erroneously listed the square footage 

at 11,556 in several sections of the Appraisal Report, although under a section identified as Property 

Assessment Data the square footage was listed as 9,603. Subsequently, the parties stipulated the actual 

square footage to be 9,353.
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size of the building.2 After conducting discovery and taking the deposition of Plaintiff‟s 

expert, Defendant filed a motion for summary judgment arguing: (1) expert testimony 

was required to establish the standard of care for auctioneers and that Plaintiff‟s expert 

failed to establish the standard of care; and (2) Plaintiff could not have relied on the 

representation of square feet because of the “as is” language he agreed to in the contract 

of sale, Terms of Sale form, and pre-auction announcement.

The trial court granted Defendant‟s motion for summary judgment on the ground 

that Plaintiff had not established the standard of care. This appeal followed. 

STANDARD OF REVIEW

This appeal arises from the grant of summary judgment. Summary judgments do 

not enjoy a presumption of correctness on appeal. BellSouth Adver. & Publ’g Co. v. 

Johnson, 100 S.W.3d 202, 205 (Tenn. 2003). The resolution of a motion for summary 

judgment is a matter of law, thus we review the trial court‟s judgment de novo with no 

presumption of correctness. Id. The appellate court makes a fresh determination that the 

requirements of Tenn. R. Civ. P. 56 have been satisfied. Hunter v. Brown, 955 S.W.2d 

49, 50-51 (Tenn. 1997).

Summary judgment is appropriate when a party establishes that there is no genuine 

issue as to any material fact and that a judgment may be rendered as a matter of law. 

Tenn. R. Civ. P. 56.04; Stovall v. Clarke, 113 S.W.3d 715, 721 (Tenn. 2003). It is 

appropriate in virtually all civil cases that can be resolved on the basis of legal issues

alone. Byrd v. Hall, 847 S.W.2d 208, 210 (Tenn. 1993); Pendleton v. Mills, 73 S.W.3d 

115, 121 (Tenn. Ct. App. 2001). It is not appropriate when genuine disputes regarding 

material facts exist. See Pendleton, 73 S.W.3d at 121; Tenn. R. Civ. P. 56.04.

This case was filed after July 1, 2011; therefore, the summary judgment standard 

set forth in Tenn. Code Ann. § 20-16-101 applies. Pursuant to this statutory standard, in 

order to prevail in its motion, Defendant must submit affirmative evidence that negates an 

essential element of Plaintiff‟s claim or demonstrate to the court that Plaintiff‟s evidence 

is insufficient to establish an essential element of his claim. See Tenn. Code Ann. 

§ 20-16-101.

ANALYSIS

 

2

Plaintiff also asserted a claim of intentional misrepresentation against Defendant; however, he 

voluntarily dismissed this claim. Plaintiff sued another defendant, BGS, Ltd., the prior owner of the 

property that hired Defendant to conduct the auction, which claim remains with the trial court. The 

judgment dismissing Plaintiff‟s claims against Defendant was declared a final appealable judgment 

pursuant to Tenn. R. Civ. P. 54.02.
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Plaintiff contends that the trial court erred in granting summary judgment because 

expert testimony is not required to establish the standard of care for auctioneers and 

genuine issues of material fact exist regarding possible violations of the rules and 

regulations governing auctioneers.

For its part, Defendant insists it was entitled to summary judgment on each of the 

two grounds it relied upon. Specifically, Defendant insists that the trial court correctly 

determined that Plaintiff failed to establish the applicable standard of care; however, 

Defendant also contends the trial court should have additionally ruled that Defendant

negated the element of justifiable reliance by establishing without dispute that Plaintiff 

agreed to the written “Terms of Sale” prior to the auction which stated that “[e]verything

will be sold „AS IS, WHERE IS‟, with no guarantee of any kind, regardless of statement 

or condition made from the auctioneer. Buyer shall rely entirely on their own inspection 

and information,” and agreed to the terms as announced by the auctioneer immediately 

prior to the commencement of the auction that the property was being sold “as is” and 

that all bidders must rely on their own inspections of the property.

For the reasons stated below, we affirm the summary dismissal of Plaintiff‟s claim 

upon different grounds than those stated by the trial court,3that Defendant negated the

essential element of reliance due to the undisputed fact that Plaintiff agreed to rely 

entirely on his own inspection and information and that he was purchasing the building 

“„AS IS, WHERE IS‟, with no guarantee of any kind, regardless of statement or 

condition made from the auctioneer.”

Negligent misrepresentation occurs when a plaintiff justifiably relies on faulty 

information supplied by a defendant who, acting in the course of her business, profession, 

or a transaction in which she has pecuniary interest, has failed to exercise reasonable care 

in obtaining or communicating that information. See Robinson v. Omer, 952 S.W.2d 423, 

427 (Tenn. 1997); see also Restatement (Second) of Torts § 552 (1977). The essential 

elements of a claim for negligent misrepresentation are: (1) the defendant was acting in 

the course of its business or profession or in a transaction in which it had a pecuniary 

interest; (2) the defendant supplied faulty information meant to guide others in their 

business transactions; (3) the defendant failed to exercise reasonable care in obtaining or 

communicating the information; and (4) the plaintiff justifiably relied upon the 

information. Robinson, 952 S.W.2d at 427. To sustain a claim for negligent 

misrepresentation, the plaintiff must establish each of these elements by a preponderance 

of the evidence. Id. Therefore, Plaintiff cannot succeed on a negligent misrepresentation 

 

3 This court may affirm a judgment on different grounds than those relied on by the trial court 

when the trial court reached the correct result. City of Brentwood v. Metro. Bd. of Zoning Appeals, 149 

S.W.3d 49, 60 n.18 (Tenn. Ct. App. 2004).
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claim unless he can establish the essential element of reliance. See McNeil v. Nofal, 185 

S.W.3d 402, 409 (Tenn. Ct. App. 2005).

Justifiable or reasonable reliance involves two different issues: whether the 

plaintiff actually relied on the misrepresentation and whether that reliance was 

reasonable. See Edmondson v. Coates, No. 01-A-01-9109-CH00324, 1992 WL 108717, 

at *2 n.1 (Tenn. Ct. App. May 22, 1992). The issue the parties have presented in this 

appeal is whether the exculpatory language in the Terms of Sale agreement and the oral 

terms announced immediately prior to the commencement of the auction negates 

Plaintiff‟s actual reliance.

Parties may agree to disclaim reliance on another‟s representations. See Ingram v. 

Cendant Mobility Financial Corp., 215 S.W.3d 367, 371-72 (Tenn. Ct. App. 2006). In 

Ingram, the plaintiff purchased a home and signed a sale contract that stated “[n]either 

party has relied upon any statement or representations made by the other party or the 

sales representative bringing the parties together not contained [in this contract].” Id. This 

court enforced this provision as written and held that it negated the plaintiffs‟ contention 

that they relied on representations that the seller‟s representative had made. Id. at 372; see 

Morgan Dev., LLC v. Morrow, No. E2010-00610-COA-R3-CV, 2011 WL 662948, at *4 

(Tenn. Ct. App. Feb. 23, 2011) (noting that signing a contract containing a disclaimer of a 

broker‟s obligation to verify certain characteristics of the property at issue implicitly 

admits that any reliance on representations about those characteristics was not 

justifiable).

Similarly, agreeing to accept real property “as is” may negate any reliance on 

representations about the condition of that property. See Stafford v. Emberton, No. 

M2008-02250-COA-R3-CV, 2009 WL 2960391, at *3 (Tenn. Ct. App. Sept. 15, 2009). 

In Stafford, the misrepresentation at issue involved the completion of certain repairs on 

the property. Id. at *1. Before purchasing the property, the plaintiffs signed an agreement 

stating that “[b]uyer agrees that they have carefully inspected the premises prior to 

signing this Agreement, and without reservation accept the Property as suitable and ready 

for use as their home, that all repairs or replacement have been completed to their 

satisfaction . . . .” Id. at *2. This court held that the plaintiffs had agreed to purchase the 

property “as is” and that doing so negated any reliance on the misrepresentation. Id. at 

*2-3.

Although Plaintiff voluntarily dismissed his claim that Defendant‟s conduct was 

intentional or grossly negligent,

4

Plaintiff contends that generic “as is” language is not 

 

4 Of course, disclaimers and exculpatory language will not protect a party from its intentional 

conduct or gross negligence. See Adams v. Roark, 686 S.W.2d 73, 75 (Tenn. 1985) (noting that the law of 

Tennessee does not favor contracting against liability for gross negligence). Such clauses are also invalid 

when they violate public policy. Olson v. Molzen, 558 S.W.2d 429, 432 (Tenn. 1977) (holding that an 

exculpatory contract signed by a patient as a condition of receiving medical treatment was invalid as 
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sufficient to negate his reliance on Defendant‟s statements. We are not persuaded by this 

argument. Although the disclaimer language in Stafford specifically addressed the issue 

of repairs on the property, this court did not base its decision on the specificity of the 

language the plaintiffs signed. See id. at *2-3. Instead, we concluded that “the agreement 

by the [plaintiffs] to accept the property „as is‟ defeats any negligent misrepresentation 

claims.” Id. at *3 (emphasis in original). 

It is undisputed that the Terms of Sale agreement that Plaintiff signed prior to 

making a bid and the announcement that immediately preceded the auction clearly and 

unequivocally stated that the property was being sold “as is.” It is also undisputed that the 

Terms of Sale and the announcement both established that Plaintiff shall rely entirely on

his own inspection and information.

Conditions of a sale at auction that are announced at the auction are binding on the 

bidder. Cunningham v. Lester, 138 S.W.3d 877, 881 (Tenn. Ct. App. 2003); Moore v. 

Berry, 288 S.W.2d 465, 468 (Tenn. Ct. App. 1955). Therefore, since there is no claim 

that Defendant engaged in fraud, intentional misconduct, or gross negligence, we have 

concluded that Defendant successfully negated the essential element that Plaintiff relied 

on Defendant‟s misrepresentation that the building was 11,556 square feet. Because 

Defendant negated an essential element of Plaintiff‟s claim, Defendant is entitled to 

summary judgment. Accordingly, we affirm the summary dismissal of Plaintiff‟s claim 

on different grounds than those relied on by the trial court.5

IN CONCLUSION

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

of appeal assessed against Plaintiff, Terry Pritchett.

______________________________

FRANK G. CLEMENT, JR., JUDGE

 

contrary to public policy); Gross v. McKenna, No. E2005-02488-COA-R3-CV, 2007 WL 3171155, at *5 

(Tenn. Ct. App. Oct. 30, 2007) (quoting In re Sikes, 184 B.R. 742, 746 (Bankr. M.D. Tenn. 1995)).

5 Our ruling on this issue renders the other issues moot.