# FILED
December 15, 19999 Cecil Crowson, Jr. Appellate Cou rt Clerk IN THE COURT OF AP PEALS OF TENNESSEE, AT JACKSON

____________________________________________________________ ) FRANK MORIMANNO , ) Henderson County Chancery Court ) No. 11248 Plaintiff/Appellee, ) ) C.A. No. W1998-00563 -COA-R3-CV VS. ) ) TOMMY MIDDLETON , ) ) Defendant, ) ) AND ) ) CENTRAL STATE BANK and ) DON CAMPAGNA AS AGENT ) FOR CENTRAL STATE BANK , ) ) Defendants/App

ellants. )

______________________________________________________________________________ From the Chancery Court of Henderson County at Lexington. Honorable Joe C. Morris, Chancellor

David A. Riddick , HOLMES, RICH, SIGLER & RIDDICK, P.C., Jackson, Tennessee Attorney for Defendants/Appellants Central State Bank and Don Campag na.
Tom Anderson , Anderson Law Firm, PLLC, Jackson, Tennessee Attorney for Plaintiff/Appellee.

OPINION FIL

ED: AFFIRMED AND REMANDED FARMER, J. CRAWFORD, P.

J., W.S. : (Concurs) HIGHERS, J. : (Concurs)Defendants Central State

Bank and Don Campagna appeal the trial court’s judgment awarding Plaintif

f/App ellee Frank Morimanno $14,500 in damages on his claim for negligent misrepresentation. We affirm the trial court’s judgment based upon our conclusion that the evidence does not preponderate against the trial court’s decision in favor of Morimanno.

In September 1996, Morimanno agreed to sell his 1992 GMC pic

kup truck to

Tommy Middleton for a price of $16,500. Middleton did not have the funds to buy the truck, so he turned to his banker, Don Campagna, for help in financing the truck’s purchase. At the time, Campagna was a loanofficer and assistant manager of the Jackson, Tennessee, branch of Central State Bank.

In ord er to induce both Campagna and Morimanno to consummate the sale of the truck, Middleton represented to them that he soon expected to receive a settlement from a

lawsuit in which he was involved. As proof of the forthcoming settlement, Middleton presented two letters that were dat ed O cto ber 6 , 19 95, and Sep tem ber 9 , 19 96, res pect ive ly, and that purported to be from Middleton’s attorney, Michael L. Weinman of Henderson, Tennessee. The first letter was addressed to counsel for Middle

ton’s former empl

oyer, Johnson

Controls, Inc. , and offered to settle Middleton’s claim for

the amount of $30,000, plus reinstatement. The second letter was addressed to “WHOM IT MAY

CONCERN” and conta

ined the following

text:

IN REGARDS TO TH E LAW SUIT CONCERNI NG TOMMY MIDDLETON

V. JOH N SON CONTROLS, THE SETTLEMENT WAS SIGNED SE

PT. 9, 1996. ALL MONIES AND ENTITLEM

ENT S AWARDED MR. MIDDLETON WILL BE SEN T TO THIS LAW OFFICE NO L ATER THAN 45 DAYS FROM THE SIGNATURE DATE.

The letters differe

d in appearance

in that the first

letter was printed onthe letterhead of Weinman’s law firm, Tatum and Ta

tum, and bore the signature “Mike,” while the second letter was printed on pl ain pap er on which someone had typed the name and address of the law f irm and signed Weinman’s initials.

On September 17, 1996, Morimanno, Middleton, and Campagna met in Campagna’s office at Central State B ank to complete the sale of the truck

. During this m

eeting, C ampagnaallege d ly

represented to Morimanno “that Mr. Middleton had a settlement coming due” and that “[a]bout November 18th he would have all his monies .” Accord ing to Morimanno, Campagna specifically

stated that “he had verified with Mr. Middleton’s attorney that there was a s ettlement andit was coming November 18th.” Based upon this representation byCampagna, Morimanno agreed to complete the sa

le of the truck on Se

ptember 17 but to de

lay recei v ing $14,500 of the $16,500 purchase price until November 18.

Morimanno previously ha d f inanced his purchase of the truck by obtaining a loan from First Tennessee Bank. During the September 17, 1996,meeting, Campagna gave Morimanno a check for about $2000 so that

Morimanno could pay off the balance of the First Tennessee loan. In accordance with Campagna’s instructions, Morimanno delivered the check to First Tennessee and obtainedthe title to the truck. Upon returning to Campagna’s office, Morimanno endorsed the truck titleand gave it to Campagna. Morimanno then returned home with the expectation that he would receive the remaining $14,500 of the purchase price on November 18, 1996, or shortly thereafter.
Contrary to his representation to Moriman no, Campagna ha d not verified with Middleton’s attorney th

at Middleton would r

eceiv e a settlement on November 18. At some point in time, Campagna reached Middleton’s attorney, Michael Weinman, by telephone and verified that Weinman represented Middleton. Weinman did not confirm, however, that Middleton soon would be receiving a settlement, and, in fact, Weinman would not divulge any inf ormation abou t his representationof Middleton beca use Middleton had n

ot authoriz ed hi m to do so. Neverthe less, basedupon the letters presented to him by Middleton, and based upon Weinman’s confirmation that he represented Middleton, Campagna believed that Middleton would receiv e a settlement in November 1996. As Campagna later explained,

I verified it to the po int w here I had these letters showing that there was supposed to be a lawsuit. I had contacted

his attorney and knew that there was such an attorney and person, but not to the fact where I actu ally tal ked with his attorne y and could v

erify that t

here was a lawsuit.

Based upon his belief tha

t Middleton soon woul

d receive a substantial settlement, Campagna had agreed to helpfinance Middleton’s purchase of Morimanno’s truck and, in the sa me transaction, toconsolidate some of Middleton’s preexisting loans at Central State Bank. At t he transaction’s conclusion, Campagna had retained the title to the GMC pickup truck as collateral.

Tommy Middleton did not receive a settlement from Johnson Controls in November 1996, and he never paid Morimanno the $14,500 balance due on the truck’s purchase price. The parties later learned that

Middleton previously had pursued a lawsuit against Johnson Controls for employment

discrimination and

breach of employ

ment contract an

d that M ichael We

inman had
r epres entedMiddleton in the law suit. Johnson Controls pa id Middleton a sum of

money to sett

le the case, but

this settlement occurred

in December 1995, not in November 1996 as represented by Middleton. Moreover, the parties learned that Weinman wrote the October 1995 letter to Johnson Controls’ counsel in

which he offere

d to settle Middleton ’s lawsuit, but Weinman did not write the September

1996 “TO WHOM IT MAY CONCERN” let ter that informed the reader of a forthcoming settlement. This letter was a forgery.

In April 1997, Morimanno filed this action against Middleton, Central State Bank, andCampagna, as the Bank’s agent. Morimanno lat er obta ined a default jud

gment against Middleton, and this matt er pro ceeded to trial solely on Morimanno’s claim for negligent misrepresentationagainst Campagna and the Bank. At the trial’s conclusion, the trial court found in favor of Morimanno and awarded him a judgment in the amount of $14,500, plus pr ejudg ment interest and cost

s.

On appeal, Campagna and t he Bank contend that Morimanno failed to prove the elementsof a claim for negligent misrepresentation. The courts of this state have embraced section 552 of the Restatement (Second) of Torts as the guiding princi ple in actions for negligent misrepresentation not based upon privity. John Martin Co. v. Morse/Diesel, Inc. , 819 S.W.2d 428, 432 (Tenn. 1991). Under this principle,

[o]ne who, in the course of his business, profession or employment,

or in any other transaction

in which he has a pecuniary interest, supplies false

information for

the guidance of

others in their business transactions, is subject to liability for pecuniary loss caused to them by the

ir justifiable

reliance upon the information, if he failsto exercise reasonable care or competence in the obtaining or communicating of the information.

John Martin Co. , 819 S.W. 2d at 431 (q uoting Restatement (Second) of Torts § 552(1) (1977)).

In order to prevail

on a claim for negligent misrepresentation under section 552, the plaintiff must prove that

(1) the defen dan t [was] acting in the course of his business, profession, or

employment, or in a transaction in which he [had] a pecuniary

(as opposed to gr

atuitous) interes

t; and (2) the defendant supplie[d] faulty info rmation meant to guide others in th

eir business tran

saction; and (3) the defendant fail[ed ] to e xercise reasona ble care in obtaining or comm

unicating the inf

ormation; and (4) the plain ti ff justifiably relie[d] upon the information [to his detr

iment].

John Martin Co. , 819 S.W.2d at 431. Moreover, the pla intiff can reco

ver under this the

ory only if the plaintiff is the person, or one of a limited grou p of persons,

for whose benefit and guidance the defendant intended to supply the information. Id . at 431-32.

In the present case, the Appellants dono t dispute that Campagna was acting in the
course o f h is business, profession, or employment. They dispute, however, w hether Campagna supplied false informatio

n to Morimanno, whe

ther Campagna f

ailed to exercise reason

able care in obtaining or communicating the information, and whether Morimanno jus tif iably relied upon the information supplied.

Our review of the tri

al court’s j udgment i n favor of Morimanno is governed by rule13(d) of the Tennessee Rules of Appellate Procedure, which provides that, in civil actions, the appellate court’s review of the trial court’s findings of fact “shall be de novo upon the record of the trial court, accompanied by a presumption of

the correctness of the finding, unless the preponderance of the evidence is otherwise.” Hass v. Knigh ton , 676 S.W.2d 554, 555 (Tenn. 1984) (quoting T.R.A.P. 13(d)). Under this standard, when a conflict in testi

mony requir

es the trial court

to makea

determination regarding the credibility of a witness or witnesse s, the trial court

is the best judge of the credibi lity and its f indings of credibility are entitled to

great weight. Tenn-Tex Properties v. Brownell-Electro, Inc. , 778 S.W.2d 423, 426 (Tenn. 1989). Unless the evidence preponderates against the trial court’s findings, this court must affirm, absent an error of law. Dailey v. Bateman , 937 S.W.2d 927, 930 (Tenn. Ct. App. 1996).

After carefully reviewing the record, we conclude that the e vidence does not preponderate

against t

he trial co urt’s judgment in favor of Morimanno on his negligent misrepresentationclaim. To the contrary, Campagna’s own testimony suppo rted Morimanno’s claim. Campagna did not deny that he represented to Morimanno that he had “ve rified” wi t h Middl eton ’s attorney that Middleton would receive a settlement in November 1996; however, Campagna

had not verified with Middleton’s attorney the existence of such a settleme

nt. Although Campagna

talked to Middleton’s attorney, Michael Weinman, on one occasion and

discovered that Weinman represented Middleton, the evidenc e wa s undisputed that Weinman did not verify the existence of a forthcoming settlement and tha

t, in fact, Weinman would not divulge any information about his representation of Middleton without Middleton’s approval.

Based upon the foregoing evidence, the trial court also could have found that Campagna

did not exercise reasonable care in obtaini n g or communicati ng the informati

on to Morimanno. Campag na admitted that Middleton’s attorney did not confirm the existence of a forthcoming settlement, yet he acknowledged representing to Morimanno that he had “verified” the existence of s uch a set tle men t wi th t he at tor ney. In re ali ty, Campagna concluded that the settlement existed based upon (1) the two letters produc

ed by Mid

dleton th at were ostensibl y written by

his att orn ey, Michael Weinman, and (2) Weinman’s verbal confirmation that he represented Middleton. In light of the limited information conveyed by Middleton’ s attorney, the trial court pr

operly cou

ld have found that Campagna was negligent in representing that he had “verified” with the attorney the existence of the se

ttlement.

Fi nal ly, the trial court could have found from the evidence that Morimanno j ustifiabl y reliedupon the informati

on provided to him by

Campagna. Morim

anno testified tha

t he entered into th e tra nsaction with Middleton based upon Campagna’s verification of Middleton’s forthcomingsettlement and that, in the abs

ence of Campag

na’s represent

ation that he ha d verified the settlement’s existence , Morimanno would not have sold his truck to Middleton. Campagna was Middleton’s banker, and Morimanno reasonably could have believed that, by

virtue of his

position, Campagna either possessed reliable kn ow ledge of Middleton’s finances or had the ability to acquire such information. In any

event, the record contains no evidence to suggest that Morimanno should have questioned the ve

racity of Ca

mpagna’s state

ment.
Citing Walker v. First State Ba nk , 849 S.W.2d 337, 342 (Tenn. Ct. App. 1992), the Appellants

suggest that Mo

rimanno had an ind

ependent duty

to invest

igate t he existence of Midd leton’s settlement and that Morimanno’s failure to conduct such an investigation p recluded hi m from recovering in

this case . Werecognize that comparative negligence is a defense to a neg ligent misrepresentation ac tion. J ohn Martin Co. , 819 S.W.2d at 432. We know of no rule of law, however, that required Morimanno to co nduct his own investigation instead of relying upon Campagna’s statement that he had verified the settlement’s existence. While Morimanno’s failure to investigate might have been relevant to the issue of comparative neglige nce, such failure did not preclude him from recovering on his claim for negligent misrepresentation.

In our view, the Appellants’ reliance upo n the Walker decision is misplaced. The Walkercase did

not involve a bank’s negligent communication of information concerning a bank cust omer; rather, it involved a bank’s failure to disclose information about one of its custom ers . There, we held that the ba nk owed no duty

to voluntarily

disclose the information, andwe observed that, despite

having nu merous opportunities to do so, the plaintiff failed to ask either the bank’s officer or its attorney about any of the details of the plaintiff’s transaction with the bank’s customer. We also observed, ho

wever, that, if the plaintiff had made such inquiries, the bank’s “officer or attorney would have been under a duty to respond fully , fairly and

accurately.” Walker , 849 S.W.2d at 342.

The trial court’s judg ment is af firmed, and this cause is remanded for further procee dings. Costs of this appeal are taxed to the Bank and Campagna, for which execution may iss ue i f nec ess ary.____________________________________ FARMER

, J.

______________________________ CRAWFORD, P.J., W.S.

______________________________ HIGH ERS, J.