IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

Assigned on Briefs November 8, 2012

DAVID DESGRO v. PAUL PACK d/b/a RESI CHEK

Appeal from the Circuit Court for Carter County

No. C12376 Hon. Thomas J. Seeley, Jr., Judge

No. E2012-00918-COA-R3-CV-FILED-JANUARY 8, 2013

Plaintiff, David Desgro, alleged that he hired defendant, Paul Pack d/b/a Resi Chek, to

perform an inspection on a house plaintiff wanted to purchase. After defendant inspected

the house and reported the house had no major problems, plaintiff purchased the house in

reliance on defendant’s report. Plaintiff claims that he then discovered multiple serious

issues with the house, including plumbing problems, insulation and heat pump problems, and

inadequate floor support. Plaintiff filed suit 13 months after the inspection was completed,

and defendant moved for summary judgment, claiming that plaintiff’s signed contract with

defendant provided that plaintiff must file suit on any claims within one year of the date of

inspection. The trial court found that plaintiff signed such an agreement and that the

contractual limitations period of one year was reasonable. The trial court granted summary

judgment to defendant, ruling that plaintiff’s claims were untimely. Plaintiff appeals. We

affirm.

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

Affirmed; Case Remanded

JOHN W. MCCLARTY, J., delivered the opinion of the Court, in which CHARLES D. SUSANO,

JR., P.J., and D. MICHAEL SWINEY, J., joined.

Kathryn J. Dugger-Edwards, Elizabethton, Tennessee, for the appellant, David Desgro.

John B. McKinnon III,Johnson City, Tennessee, for the appellee, Paul Pack d/b/a Resi Chek.
OPINION

I. BACKGROUND

On January 6, 2009, the parties met at the subject home and plaintiff signed an

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agreement that was presented to him by defendant regarding performance of the home

inspection. This agreement, titled “NACHI Home Inspection Agreement,” provides,

CLIENT shall have no cause of action against INSPECTOR after one year

from the date of the inspection.

The inspection was performed that same day. Plaintiff filed this lawsuit on February 2, 2010,

more than one year from the date of inspection. The trial court granted summary judgment

to defendant, finding that the contractual limitation period was reasonable and enforceable.

The trial court stated that plaintiff “had plenty of time to find any deficiency” because he had

been living in the home for at least ten months when the contractual limitations period

expired.

II. ISSUES

We consolidate and restate the issues raised on appeal by plaintiff as follows:

A. Whether the agreement was an unenforceable contract of adhesion.

B. Whether the agreement was void as against public policy.

C. Whether the trial court erred in granting summary judgment based on

plaintiff’s failure to file this lawsuit within one year from the date of the home

inspection.

At the trial court level, plaintiff disputed that he signed the subject agreement, admitting that he 1

signed something that day but did not know what it was. Defendant presented the original agreement as an

exhibit, and testified that it was the document that plaintiff signed. The court was given examples of

plaintiff’s signature on other documents. The court ultimately found that plaintiff signed the agreement and

that defendant’stestimony regarding plaintiff’s signature on said document was more credible. Plaintiff has

not appealed that finding.

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III. STANDARD OF REVIEW

A grant of summary judgment is not presumed correct by this court; rather, this court

must “make a fresh determination” in each case that the requirements of Tenn. R. Civ. P. 56

have been satisfied. Watson v. Waters, 375 S.W.3d 282, 291 (Tenn. Ct. App. 2012). In

doing so, this court must consider the evidence in the light most favorable to the non-movant

and draw all reasonable inferences in his favor. Id.

As this court has previously explained:

The interpretation and construction of a plain and unambiguous written

contract is a question of law for determination by the court. It is the duty of

the court to enforce the contract according to its plain terms, and the language

used in the contract must be taken and understood in its plain, ordinary and

popular sense. However, “the cardinal rule for interpretation of contracts is to

ascertain the intention of the parties and to give effect to that intention as best

can be done consistent with legal principles.” Courts may determine the

intention of the parties “by a fair construction of the terms and provisions of

the contract, by the subject matter to which it has reference, by the

circumstances of the particular transaction giving rise to the question, and by

the construction placed on the agreement by the parties in carrying out its

terms.”

BFS Retail and Commercial Operations LLC v. Smith, 232 S.W.3d 756, 758 (Tenn. Ct. App.

2007) (citations omitted).

IV. DISCUSSION

A.

Plaintiff argues that the agreement at issue was an unenforceable contract of adhesion

because it contains unconscionable and oppressive terms. Plaintiff notes that the contract

provided that if he failed to notify defendant of adverse conditions within 14 days of

discovery, defendant would be released from all liability. Plaintiff also notes that the

contract provided that if defendant was negligent, his damages were limited to the amount

of the inspection fee. Plaintiff asserts that the language limiting his time for bringing a claim

to one year from the date of the inspection was unconscionable and oppressive.

An adhesion contract has been defined as:

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a standardized contract form offered to consumers of goods and services on

essentially a ‘take it or leave it’ basis, without affording the consumer a

realistic opportunity to bargain and under such conditions that the consumer

cannot obtain the desired product or service except by acquiescing to the form

of the contract . . .. Courts generally agree that ‘[t]he distinctive feature of a

contract of adhesion is that the weaker party has no realistic choice as to its

terms.’

Buraczynski v. Eyring, 919 S.W.2d 314, 320 (Tenn. 1996) (citations omitted). The

agreement at issue in this case is a standard form contract that leaves the consumer with little

or no choice as to its terms. However, plaintiff did not prove that defendant would not have

performed the service if he did not sign the contract. Plaintiff also did not question the terms

of the agreement and was not told that he had to sign it to procure the home inspection.

Further, he could have sought the service from another provider if he did not agree to the

terms of the agreement. As such, the contract is not an adhesion contract. See, e.g., Pyburn

v. Bill Heard Chevrolet, 63 S.W.3d 351, 359-360 (Tenn. Ct. App. 2001) (holding that the

contract was not an adhesion contract where plaintiff was not required to sign the document,

when there was no evidence that plaintiff questioned defendant about the contents of the

document, and when plaintiff could have bought a van elsewhere if he did not want to sign

the contract); Estate of Mooring v. Kindred Nursing Centers, No. W2007-02875-COA-R3-

CV, 2009 WL 130184, *5(Tenn. Ct. App. Jan. 20, 2009) (holding that the arbitration

agreement was not an adhesion contract where proof showed that patient would have been

admitted to nursing home even if patient refused to sign arbitration agreement); Wilson

Pharmacy, Inc. v. General Computer Corp., No. E2000-00733-COA-R3-CV, 2000 WL

1421561, *3 (Tenn. Ct. App. Sep. 21, 2000) (holding that statements by plaintiff that he did

not know of any other computer corporation which would provide a comparable service or

that he was offered a standardized contract “on a take-it-or-leave-it basis” were insufficient

to show a contract of adhesion).

In Buraczynski, the Court was confronted with the question of whether to enforce

certain arbitration agreements between a physician and his patients. The Court determined

that the agreements were adhesion contracts because (1) the agreements were “standardized

form contracts” prepared by the party with superior knowledge of the subject matter -

provision of medical services, (2) the agreements were admittedly offered to the patients on

a ‘take it or leave it’ basis, (3) if patients refused to sign the agreements, the physician would

have discontinued their medical care, and (4) while the patients “could have refused to sign

the arbitration agreements and sought out another physician in the area, that action would

have terminated the physician-patient relationship (ordinarily one of trust) and interrupted

the course of the patient’s treatment.” Buraczynski, 919 S.W.2d at 320. The Court ultimately

enforced the arbitration agreements because the terms were not unconscionable, oppressive,

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or outside the reasonable expectations of the parties. Id.

In this case, the agreement at issue is not an adhesion contract because it was not

shown that plaintiff had to “take it or leave it” or that he was forced to acquiesce to the terms

of the agreement to get the service he desired. Plaintiff did not question the terms of the

agreement, did not attempt to bargain with the defendant regarding the agreement, and there

was no proof that defendant told plaintiff he had to sign the document to obtain the service.

Plaintiff stated that he contacted defendant at the recommendation of his realtor, but plaintiff

likely could have obtained the service from someone else because plaintiff did not show that

defendant was the only home inspector in the area. Accordingly, we do not need to examine

the contract’s provisions to determine their reasonableness because the agreement at issue

is not a contract of adhesion. See Estate of Mooring, 2009 WL 130184 at *6.

B.

Plaintiff also argues that the trial court erred in failing to hold that the “exculpatory”

clause was void as against public policy. Our Supreme Court has held that an exculpatory

clause in a contract is unenforceable when it affects the public interest. See Crawford v.

Buckner, 839 S.W.2d 754, 758-759 (Tenn. 1992) (finding an exculpatory clause in a

residential lease contract to be contrary to public policy); Olson v. Molzen, 558 S.W.2d 429,

432 (Tenn. 1977) (holding an exculpatory clause in a contract for medical treatment is

contrary to public policy). Home inspections have been deemed by this court to be a “service

of great importance to the public,” and the exculpatory clauses contained in home inspection

agreements have been determined to affect the public interest as well. Carey v. Merritt, 148

S.W.3d 912, 918 (Tenn. Ct. App. 2004); Russell v. Bray, 116 S.W.3d 1, 8 (Tenn. Ct. App.

2003).

In the Russell case, the home inspection agreement contained the following clause:

BY SIGNING THIS AGREEMENT, CLIENT EXPRESSLY AGREES THAT

ANY LIABILITY OF HOMETEAM, ITS EMPLOYEES, AGENTS,

OFFICERS, AND DIRECTORS, SHALL BE LIMITED TO THE LESSER

OF THE COST TO REPAIR (adjusted for the remaining life of the problem

item) OR THE AMOUNT OF THE INSPECTION FEE PAID BY CLIENT.

Id. at 3. Similarly, in Carey, the agreement stated:

[t]his company assumes no liability and shall not be liable for any mistakes,

omissions, or errors in judgement of an employee beyond the cost of the report.

This limitation of liability shall include and apply to all consequential

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damages, bodily injury and property damage of any nature.

Carey, 148 S.W.3d at 914. In both cases, the exculpatory clauses were held to be void as

against public policy and unenforceable.

In this case, plaintiff argues that the clause stating that plaintiff “shall have no cause

of action against INSPECTOR after one year from the date of inspection” is also an

exculpatory clause which should be held to be void as against public policy. Defendant

argues that this is not an exculpatory clause, but rather a contractual limitation on the time

period for filing suit, which the courts of this State have consistently upheld.

Tennessee has long-recognized the “well-established general rule that in the absence

of a prohibitory statute, a contract provision is valid which limits the time for bringing suit,

if a reasonable period of time is provided, and that the general statutes of limitations are not

prohibitory of such contractual provisions.” State v. Evans, 334 S.W.2d 337, 342 (Tenn. Ct.

App. 1959). As this court has previously explained:

Tennessee courts, however, have consistently upheld contractual periods of

limitations that reduce the statutory period for filing suit. See, e.g., Guthrie v.

Connecticut Indemnity Ass’n, 49 S.W. 829, 830 (Tenn. 1899) (holding that

insurance policy’s limitation for bringing suit was valid); Tullahoma Concrete

Pipe Co. v. Gillespie Constr. Co. & U.S. Fidelity & Guar. Co., 405 S.W.2d

657, 664 (Tenn. Ct. App. 1966) (holding that provision in contract that suit

must be brought within one year after sub-contractor ceased work on project

was valid); Das v. State Farm Fire & Cas. Co., 713 S.W.2d 318, 324 (Tenn.

Ct. App. 1986) (holding that dismissal of plaintiffs’ suit was justified by their

failure to sue within one year after insurance company’s first denial of

liability); Hill v. Home Ins. Co., 125 S.W.2d 189, 192 (Tenn. Ct. App. 1938)

(holding that contractual limitation requiring suit on fire policy to be

commenced within one year after date of loss was valid and enforceable).

Fortune v. Unum Life Ins. Co. of America, 360 S.W.3d 390, 398 (Tenn. Ct. App. 2010).

In this case, the language plaintiff complains of is not an unenforceable exculpatory

clause. The language is a contractual limitations period, which our court has repeatedly held

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While the agreement does contain an unenforceable exculpatory clause limiting defendant’s 2

liability, similar to the clauses in Russell and Carey, this clause was not the basis for the trial court’s ruling,

as the trial court held that it was unenforceable. The agreement states that if any provision is found to be

(continued...)

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to be enforceable so long as the period is reasonable. The provision does not exculpate

defendant from most or all liability, but rather limits the time period within which plaintiff

can file suit against defendant. Thus, plaintiff’s argument in this regard is without merit.

C.

Finally, plaintiff argues that the trial court erred in granting summary judgment based

on the unreasonable contractual limitations period. Plaintiff does not argue that one year was

an unreasonable time period; rather, he argues that the one-year period should have began

on the date that plaintiff purchased the home instead of the date of the inspection. Plaintiff

purchased the home on February 10, 2009; thus, his suit would have been timely if the claim

accrued on the purchase date, rather than the inspection date.

This court has upheld one year contractual limitations periods in many instances, and

that time period is not invalid simply because it commenced on a date prior to plaintiff taking

possession of the house. Plaintiff admits that he moved into the house about one week after

purchasing it and that he “began to discover problems with the house” after moving in. The

trial court found that plaintiff had approximately 11 months after moving into the house to

discover problems and file suit within the contractual limitations period. Plaintiff signed the

subject agreement and agreed to the contractual limitations period, and it is reasonable. The

trial court properly upheld the contractual limitations period and granted summary judgment

to defendant because plaintiff’s suit was untimely.

V. CONCLUSION

The judgment of the trial court is affirmed, and the case is remanded for such further

proceedings as may be necessary. Costs of the appeal are taxed to the appellant, David

Desgro.

_________________________________

JOHN W. MCCLARTY, JUDGE

(...continued) 2

unenforceable, the remaining provisions will remain in effect. 

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