# FILED August 17, 1998 Cecil Crowson, Jr. Appellate C ourt Clerk IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

PAUL EDW ARD HEN RY, et ux, ) C/A NO. 03A01-9804-CH-00121 ELIZABETH ANN HENRY, ) ) KNOX CHANCERY Plaintiffs-Appellants, ) ) HON. F

REDERICK D. McDONALD, v. ) CHANCELL OR ) NOV A, INC ., ) AFFIRMED ) AND Defendant-Appellee. ) REMANDED

DONALD E. OVERTON and GLENNA W. OVER

TON, OVERT ON & OVERTON, Knoxville, for Plaintiffs-Appellants.
BEECHER A. BARTLETT , JR., KRAMER, RAYSON, LEAKE, RODGERS & MORGA N, Knoxville, for Defendant -Appellee.

O P I N I

O N Franks, J.
In this act

ion, plaint

iffs sued defendant for

“money damages” on the grounds of “misrepres entation, mut ual mistake, br

each of warranty and negligence regarding th e purchas e of a new residence” from def endant. Th e recision of the sale was also s ought.

The Chancellor granted de fendant summary judgment, stati ng: [T]he plainti

ffs have testi

fied by affida

vit that about

one month after2 closing on September 29, 1993, they not

iced a large,swift stream flowing through thei

r back yard. Therefore, the Court finds that plaintiffs ’ cause of action a ccrued approximatel

y one month after Septemb er 29, 1993 , and suit filed b y plaintiffs on M arch 10, 19 97 is barred by the statute of li mitations. Plai nti ffs h ave r

ais ed severa

l is sues whic h may

be co nden sed i

nto t wo issues for co nsideration. F irst, they insist that the fo ur-year implied warranty recognized in Dixon v. Mou ntain C ity Con structio n, 632 S.W .2d 538 (T enn. 1982 ), is applicable to the facts of this case, and that the statute o f limitations do es not bar th eir action for fraud,

misrepresenta

tion, negli

gence and violation of the Consumer Protection A ct.

The record establi shes that pla intiffs purc

hased a newly-const

ructed residence from defendant on September 29, 1993. At t he time of purchase pl aintiffs received a “new home limit ed warranty” for

a period extending f

rom September 19, 1993 through September 29, 1994. Approximately one mont h after closi

ng, plainti

ffs noticed a large

swift stream flowing through their back yard, and compl ained to the defendant about the fl

ooding problem, pursua nt to the expres s warranty. Defendant made attempts in March and May of 1994 t o correct the fl

ooding problem by constru cting a s wale, b ut the pr operty co ntinued to flood
.

On the authority

of Dixon , plaintiffs argu e that they are en titled to rely on an implied warrant

y of good workmanship, mater ials and fit

ness for habitat

ion, which would extend for four y ears. However, the Dixon Court limited i mplied warranties to s ales “only when the written contr act is sil ent” and held that

vendors and purchasers were free t

o contract in wri

ting for a warrant

y upon different

terms and conditions o r to expressly disc laim any wa rranty. In this case, th e written w arranty provided by defendant

to plainti

ffs is sty led “a new home limited warr anty” and the first paragraph thereof states in bold l etters: THIS WARRANTY IS IN LIEU OF ANY AND ALL OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED3 WARRANTIES OF HABITABI LITY OR MERCHANTABILI TY. and sets forth t

he specific matt

ers warrantied,

and that it was for

a one-year per

iod from the date of tr

ansfer of tit

le or of the owners t

aking physica

l possession, whichever was first. The written one-y ear express warrant

y in thi s case was a part of the contract of

sale. Plai

ntiffs accept

ed this warranty

at closing,without protest , and subsequently

relied on the warr

anty in making c laims against the seller . The contractual warr

anty clear

ly disclaimed all other

warranties, including impli ed warranties via

ble in Dixon . Acc ordi

ngly , th e imp lie d warr

anty purs uant to T. C.A. §47-2-725 for a period of four years was r

endered inapplic able by the cont ract of the parties, which effectively limited the

warranties to t

hose expressed in t

he written contrac t. The grav amen of the comp laint is essentially for m oney dama ges, and it is alleged t

hat “the fair

market value of plai

ntiffs’ proper

ty has eit her been destroy

ed or has a fair market

value far less

than the purchase pr

ice”. The applicable statut e of limitati ons for actions for

injury t o real propert

y is T.C.A. §28- 3-105, and requir es that such actions must be

brought within t

hree years. In Pres cott

v. Ad ams , 627 S.W.2d 134 (Tenn. App. 1982) the pla intiff had sued for

recovery on t

heories of fraud, misrepresenta

tion, negli

gence, breach of fiduciary duty and breach of implied warranties and re scission of t he contract. The Prescott Court held: Since the gravamen of the c omplaint in thi s case is for damages t o real property, we think all of the theories advanced by the plaintiffs are govern ed by the three-yea r statute o f limitatio ns. (Em phasis s upplied ). Id. p. 137. Since this act ion was filed more than t hree years a

fter the “dis covery” of the damage to plaint

iffs’ propert

y, we hold the s tatute of li mitations bar

s this acti

on, and the judgment of the Chancer y Court is aff

irmed. The cause is remanded with costs of the appeal assessed to appellants.4 __________________________ Herschel P. Franks, J.
CONCUR:

___________________________ Houston M. Godd ard, P.J.

___________________________ Don T. McM urray, J.