# FILED

Au gust 7, 1996 Cecil W. Crowson Ap pellate Cou rt Clerk JENNIFER FRANK ) ) Plaintiff /Appella nt, )

) Davidson

Circuit ) No. 89- 186 1-I ( III) VS. ) ) Appeal No. ) 01A01-9601-CH-00044 ALI NOUREDDINI

and wife, ) OLI FATE NOUREDINN

I, ) NATIONAL

HOMES, INC., AMERICAN ) REALT Y COMPANY , TERRY ) STEPHENS, LEE ANN HOFFMAN , ) BANC PLUS MORTGAGE ) CORPORATION, EXCEL LA MORTGAGE) CORPORATI

ON, SHI RLEY A DKI NS, ) ALAN SATURN AND THE U.S.A. ) INSURANCE CORPORATION OF NEW ) YORK, D/B/A TITL

E U.S.A., )

) Defend ants/Appe

llees. )
IN THE COURT OF APPEALS OF TENNESSEE MIDD LE S EC TION AT N AS HVILLE
APPEAL FROM THE CHANCERY COURT OF DAVI DSON COUNTY AT NASHVIL

LE, TENNESSEE
HONORABLE ROB ERT S. BRANDT, CHANCELL OR
Sherrie L. Durham #13224 111 West Division Street Mt. Juliet, TN 37122 ATTORNEY FOR PLAI

NTIFFS/APPEL

LANTS Fred Cowden #2469 211 Third Avenue North Nashville, TN 37201 ATTORNEY FOR DEFENDANT/APPEL LEE Cornelius & Collins C. Bennett Harrison, Jr. #5702 Suite 2700 Nashville City Center P.O. Box 190695 Nashville, TN 37219-0695 ATTORNEY FOR DEFENDANT/APPEL LEE Michael J. Philbin #2897 One Union Street P.O. Box 198169 Nashville, TN 37219-8169 ATTORNEY FOR DEFENDANT/APPEL LEE-2-

AFFIRMED AND

REMANDED.
HENRY F. TODD

PRESIDING

JUDGE, MIDDL

E SECTION
CONCUR: SAMUEL L . LEWIS, JUDGE BEN H. C ANT RE LL-3-

JENNIFER FRANK ) ) Plaintiff /Appella nt, )

) Davidson

Circuit ) No. 89- 186 1-I ( III) VS. ) ) Appeal No. ) 01A01-9601-CH-00044 ALI NOUREDDINI

and wife, ) OLI FATE NOUREDINN

I, ) NATIONAL

HOMES, INC., AMERICAN ) REALT Y COMPANY , TERRY ) STEPHENS, LEE ANN HOFFMAN , ) BANC PLUS MORTGAGE ) CORPORATION, EXCEL LA MORTGAGE) CORPORATI

ON, SHI RLEY A DKI NS, ) ALAN SATURN AND THE U.S.A. ) INSURANCE CORPORATION OF NEW ) YORK, D/B/A TITL

E U.S.A., )

) Defend ants/Appe

llees. )



### O P I N I O N The Plaintiff, Jennifer Frank, has appealed from summary judgment in favor of the Defendants, American Realty Company, Terry

Stephens, Lee Ann Hoffma n, Shirley Adkins and Alan Saturn; a nd from a judgmen t in favor of Plaintif

f and ag ainst the D efenda nt, Ali Nouredd ini in the a

mount of $5 0,000. Oth

er capt ioned Defendant s are not

involved in this appeal.
On January 18, 1989, a contra ct for Sale of Real Estate was executed describing the property a

nd terms of sale. Plaintiff was the designated buy er, and signed her name. The seller w as designed as Na tional Hom

es, but the

seller’ s signat

ure wasN. Homes, Inc ., By Ali Nouredd ini, (Pre s.). The

listing br oker wa s design ated as A merican Realty . Pertine

nt provisions of the contract were:

Purchase

price $1 36,000 pa

ya ble as fo llows: Bu

ye r to obtain 70% LTV conventional loan. This contra ct is contingent upon Buyer ’s ability to qualify

for a new loan. Buy

er agrees to make said loan application on or before 1/31/89. Sale will be closed upon loan approval and completion of home-4- no later than 3/31/89. Seller to furnish garage door (illegible) back y ard to railroad ties. Corr ect stair case to b asement , corre ct water in baseme

nt walls.
On April 3, 1989, a Disclosure/Settlement Statement was signed by Plaintiff and National Homes, I nc.. I t contained the fo llowing i tem: 506 Escrow for landscaping: $1,800.00 The original comp laint wasfiled on July 14, 1989, a

gainst t he capti oned Def

endants, alleging that each was g

uilty of fraudulent induce ment of Plaintiff to enter into the contract and/or close the sale.

On Januar

y 29 , 1991, the

Trial Cour

t entere d summary

judgmen ts in favo r of Olif ate Noureddini, Shirley Adkins and Alan Satur n.
On the same date, January 29, 1991, Plaintiff filed an amended complaint identical with the first complaint except for a single paragr aph #51:
Defendants Saturn and Noureddini failed to have a 2- 10 Home Buye

rs Warranty issued to the plaintiff a t closing as required by

the purchase contract. Although def endant Saturn was aware of this requirement, he instructed de fendant Ali Noureddini to sign a one year FHA Warranty which defendant Saturn falsely

represented to the plaintiff as the warranty she had contracted for. On March 30, 1991, an agreed or der dismissed U.S.A. Insurance Corpor ation of New York .
On June 13, 1994, American Realty Company , Terry Steve ns and Lee Ann Hoff

man were dis missed by

summary judgmen t.-5- On January 30, 1995, a non-jury judgment was rendered in favor of Plaintiff and Noureddini for $50,000. No judgment was rendered in respect to National Homes, Inc
.
Plaintiffs’ issues and arguments are presente d separately in response to each appellee.
Shirley Adki ns Plaintiff asserts that the summary judg ment in favor of Shirley Adkins was in error because there was evidence from which a jury

would be justified in finding her liable. There is evidence that M s. Adkins w as an app raiser e mployed by

Excella Mo

rtgag e Company

to ap pr ai se th e h ou se in qu es ti on fo r p ur po se s o f a pp ro vi ng a l oa n t o p la in ti ff se cu re d b y a mortga ge on the house. The aff

idavit of t he loan of

ficer o f Excella

states: I arrang ed for Shirley Adkins, a n appraiser in town, to appraise the property

for Ms. Frank. Ms. Frank paid for the appraisal by c

heck. Jennifer Frank was not knowledgeable a bout construction and rea l estate. That is one

reason w e hired a

n apprai ser: to protect the purchaser and the mortga ge company . Ms. Frank o ften stat

ed that sh e did not know any

thing ab out building houses, but if the appraiser and every one did their job she would be protected. She expres sed seve ral times th at sh e t ru st ed ev er yon e t o d o t he ir jo b p ro pe rl y. Two or three day s before the closing was to take place , I received a

telephone call from Jennifer Frank. She stated that she was extremely conc erned over water pooling in the basement of the house being constructed a nd requested that I communic ate that t

o the appr aiser be fore the final inspection. I called Shirley

Adkins’ office to order a final inspection and left a message reg arding the water in the basement with the secretary

or receptionist who answered the telephone. I also called Ali Noureddini about the wa ter problem in the basemen t. Ms. Fran

k compile d a “punc

h list” of m

inor finis hing ite

ms to be completed or connected. Ms. Frank neve r mentioned any major def

ects. Based on my

experience with Ms. Frank, I believe she

would hav e told me if

she knew of serious construction defects. Accord ing to the final ap praisal r eport, th e house w as satisfactorily

complete d except f

or minor d

etails suc h as landscaping and wallpaper. Ba ncPlus agreed to escrow-6- approximately $1,200.00 to complete the landsca ping. The mortg age wa s approved on that ba sis.
The evi dence i s unco ntrov erted t hat Ms . Adki ns was emplo yed by Excell a Mort gage Company to estimate the value of the property for

the purpose of determining whether it was suitable security for

the loan requested by

Plaintiff, that she was paid by Excella, and ha d no obligation to any pe

rson or firm except Excella. The mere fact that Excella told Ms. Adkins that the Plaintiff had certain concerns reg arding the house did not impose upon Ms. Adkins any obliga

tion to Plaintiff. Also, the mere fact that Excella required Plaintiff to pay for the appraisal does not obligate Ms. Adkins to Plaintiff. It is common knowledg e that an applicant for a mortgage

loan is required to pay

for the appraisal as an expense of processing the application.

Plaintiff cites Tartara v. Palumbo , 224 Tenn . 262, 453 S. W.2d 780 (1 970), whe rein the Supre me Court he

ld that a su

rveyor employ

ed by the selle r to surve y la nd for the purpose of describing the property in the deed of transfer could be held liable for negligence in the survey. This authority

is distinguishable from the present case in which the appra iser had no cause to believe that her report of the value of the house would be relied upon by the buyer to her detr iment.

No erro r is found in the summa

ry judgmen t dismissing

Shirley Adkins.

Alan Saturn Alan Saturn was designated by Excella Mortgage Company to prepare the necessary document s for clo sing the sale, to s upervise

their pro per execution and t

o proper ly a llocate and disburse the funds provided by Excella. His fee was paid out of the same fund.

Plaintiff asserts t hat Mr. Sa

turn fail ed to cau se a 2-10 Warranty to be issue d. This was a ty pe of insu rance p olicy

to indemnif

y Pla intiff fr om faults in the house

which be came-7-

appare nt at leas t 2 y ears and not more than 10 y ears af ter the c losing. T

he evide nce is uncontradicted that Mr. Saturn retained funds to pay for the policy a

nd that he did pay for

the policy. Moveover, none

of the complaints asserted in this case arose at least 2 y ears after closing. Plaintiff asserts that Mr. Saturn represented to her tha t the one-yea

r warranty

signed by the builder was a

satisfactory substitute for the 2-10 warranty . All of Plaintiff’s present compl aints are dur ing th e firs t year and w ere cov ered by the one year war ranty. Ev en tho ugh the 2-10 warranty

may have ne

ver been received, it was paid for a nd enforceable as to any complaints arising 2 ye ars or more after the closing. F or this reason, any

misrepresentation as to warranty

coverage was irre

levant to the present dispute.
Plaintiff next asserts that Mr. Saturn effected the closing even thoug h there was an outstanding judgment lien a gainst t he prope rty . The evi dence isuncontro verted t hat the tit le policy of the De fendant , U.S.A. I

nsuranc e Company

of New Y ork protects Plainti ff from l oss on account of said lien, that the matter was eventually settled and the said insurance company was dismissed from this suit by agreed order mentioned above.

Plai ntiff compl ains o f vari ous re presen tati ons m ade to her by Sat urn aft er the c losi ng, but the evidence is uncontroverted that the duties of Saturn to Plaintiff were c onfined to the closing of the sale and that no actionable repr esentations were made to Plaintiff by Saturn on the da te of cl osin g.
No error is found in the summary judgment dismissing Alan Saturn. Stevens, Hoffman and American Realty, Inc. These appellees have filed no brief in this Court. I n the Trial Court, they filed a n answer and a motion for summary judgment rely

ing only upon the de

position of Plaintiff and their supporting brief. The brief is not included in the appellant record. The complaint allege s: Mr. Stevens and Ms. Hoffman made material repre sentations to-8- Plaintiff that Ali Noureddini/American Homes, Inc . was an excellent buil der wi th a so lid re putat ion i n the c ommu nity for h ome bu ildi ng. The plaintiff at all times relied on the superior knowledge a nd expertise of defendants Terry Stevens and Lee Ann Hoff man. In re ality , defend ants Steve ns and Hof

fman’s r eprese ntations about the skill and reputation of Noureddini/American Homes, I nc. were false. Plaintiff alleges that these defendants knew their r epresentations about Noureddini/National Homes, Inc. we re false at the time they were made, or, in the alternative, these defendants made these representations without having made sufficie nt inquiry and without sufficient knowledge as to the truth or falsity of their statemen ts. During discussions with Terry Stevens and Lee Ann Hoff man, Mr. Steve ns and Ms. H offman r

eprese nted to the

plaintiff that the subject home would be completed no later tan March 31, 1989. In direct reliance

upon the representations of Terry Stevens, Lee Ann Hoffman, A

li Noureddini and National Homes, Inc., the plaintiff entered into a contract for the purc hase of the home at 1232 Reelfoot Circle. As the completion date for the subject home approached, the Plaintiff expresse d conce

rn to def endants H offman a

nd Steven s as agent for American Rea lty and National Homes, I nc. that her home might not be completed in a timely fashion. De sp it e t he fa ct th at th e d ef en da nt s A me ri ca n R ea lt y, T er ry Stevens, Lee Ann Hoffma n, National Homes and Ali Noureddini knew tha t the subject home wa s not compl ete, ea ch repe atedly ur ge d t he pl ai nt if

f t o g o a he ad wi th cl os in g. Mo re sp ec if ic al ly, these defendant s repre sented to the plain tiff that the home w as ready a nd suitable for occupancy and that any re

maining work was minor. The defendants, American Realty , Terry Steve ns, Lee Ann Hoffman , Nationa

l Homes, I

nc., and Ali Noure ddini, at a

ll times mater ial he reto, poss ess sp ecial skil l and k nowle dge regar ding the construction and sale of real estate. The plaintiff in direct reliance on the repre sentations of defenda nts Ameri can Rea

lty, Terry Stevens, A

li Noured dini and Nat ional Homes , inc. , agreed to pro ceed wi th th e clos ing of th e s ub je ct pr op er ty. The plaintiff last viewed the property the day bef

ore closing and expressed concerns to the defendants Terr y Stevens, L

ee Ann Hoff man and A

li Noured dini and e mployees of the Excella Mortga ge Compa

ny a bout whet her the home would

be comple

te and rea dy f or occup ancy

by t he closin g date. These de fendant s repeatedly

assured plaintiff that every thing would be completed-9- in the timely and workmanlike manne r. Although the home

was not finished, th

e defendants, Ali Noureddini, Terry

Stevens, Lee Ann Hoffma n, and American Realty and Excella Mortg age urged the plaintiff to close on the home. The defendants, in order to induce the plaintiff to close, created a “punch list” of uncompleted items to be corr ected by d efenda nt Noure ddini and/

or defe ndant Na tional Hom

es immediate

ly f ollowing closing . A copy

of said pu

nch list is attach ed here to as Exhibit C
. In dir ect reli ance on

the repr esentat ions of Te

rry Stevens, Lee Ann Hoffman, A

merican Realty , Ali Noureddini, National Homes, Inc., Excella Mortg age and Shirley Atkins, the plaintiff closed the loan papers on the home on April 3, 1989. The plaintiff asserts that the defendant American Re alty, Inc., Terry

Stevens, Lee Ann Hoffma n, Excella Mortgage Corporation, Shirley Adkins, Ali Noureddini, Olifate Noureddini, National Homes, Inc., a nd Shirley Adkins, knew or should have known prior to the closing on the su bj ec t p ro pe rt y th at no Ce rt if ic at e for Us e a nd Oc cu pa nc y had been issued. The plaintiff alleges that the acts of Ali Noureddini, individually, and National Homes, I nc., Terry Stevens, Lee Ann Hoffman, Shirley Adkins, and Alan Saturn constitute misrepresentation. The plaintiff, as a direct and proximate result of the Defendants’ misrepresentations, has sustained severe and extensive damage s. Pl ai nt if f a ll eg es th at th e a ct s o f A li No ur ed di ni , i nd iv id ua ll y, and NationalHomes, Inc., Te rry Stevens, L

ee Ann Hoffman, Shirley Adkins, a

nd Alan Sa

turn cons titute neg

ligent misrepresentation. Plaintiff

allege s that def

endants A

li Noured dini, Nati onal Homes, Inc., Terry

Stevens, Lee Ann Hoffma n, Alan Saturn an d A me ri ca n R ea lt y, In c. , k ne w t ha t h er ho me wa s n ot re ad y for occupancy , knew it had not been approved by the Metropolitan Codes Administration for Davidson County, and knew that no use and occupancy letter had been issued. These defenda nts also knew that th

ere we re substa ntial cod e violatio ns causing the subje ct home to

be unhab itable. D espite thi s knowledge, the defendants, and ea ch of them, urged the plaintiff to close on the subject home, and conspired to conceal the true state of facts from the plaintiff. Further more, the se defe

ndants, a nd each of them, k

new abou t the cloud on plaintiff’s title, yet ea ch of them conspired to conceal this fact from plaintiff and persuade d her to close the-10- purchase. The deposition of Plaintiff consists of two volumes and 418 pages. I t has been reviewed thoroughly . The deposition of Plaintiff shows conclusively that she ha s no evidence to support an award of damages ag ainst these defendants on any ground alleged in the complain t.
In summary , Plaintiff contracted with a corporation to buy a house from a corporation and did close the purchase of the house from the cor poration even though it was not completed to her satisfaction. She say s she closed the sale on the advice of her lawy er who told her she could rely

on the defendants to protect her. On such evidence , legal liability of third parties to the transaction cannot rest.

Plaintiff cites Gray v. Boyle Investment Company , Tenn. App. 1990, 803 S.W.2d 678, which is distinguishable. In that case the broker received the purchase money from Plaintiffs and released it to the seller knowing that the holder of a mortgage holder wa s foreclosing on the property. The

re is no showing in the present case of any such assumption of obligation by the broker

or its agents. Moreover, in the cited case, the infirmity in title was not such as
wo ul d b e a pp ar en t t o t he pu rc ha se r a nd re su lt ed in th e l os s o f t he pu rc ha se mo ne y.
In the present case , Plaintiff knew of the defects in the house when she completed the transaction. Plaintiffs’ deposition shows that she has no evidence that these defenda nts had knowledge contrary

to the opinions expressed to her.
Under these circumstances, summary judgment for these defendants was prope r. Moman v. Walden , Tenn. App. 1986, 719 S.W.2d 533, Celotex v. Catrett - U.S. - 10 6 S Ct. 2548, 91 L. Ed 2d 285 (1986).-11- Ali Noureddini This defendant was the sole stockholder, president and active controller of National Homes, Inc., from which Plaintiff purc hased the house in question. As previously stated, the corporate seller was not sued in this case, despite its obvious liability as builder and seller of the house. Plaintiff seeks to impose liability upon the owner of the corporation upon theories of fraud, deceit, breach of wa rranty violation of the Te nnessee Consumer Protection Act and mutual mista

ke of fa ct.
As to this defendant, the Trial Court did not grant summary

judgment, but considered all t he evi dence a nd ent ered an order s tati ng:

[T]he Court found that the Defendant, Ali Noureddini was negligent and did not build the house in question in a good and workman like manner. The Court determined that the Plaintiff is entitled to recover damages in the amount of fifty thousand dollars ($50,000.00) f rom the Defendant Ali Noure ddini. On appeal, Plaintiff complains that the Trial Court failed to find that this Defendant deceived and defrauded her and failed to award punitive damages, “ liquidated damages” and attorne ys f ees. ThisDefend ant filed no brief in this Cour

t.

Plaintiff’s brief cites no evidence of actual fr aud in misrepresenting a present fact, but relies up on stateme

nts of Def endant a s to what he

would do in

the futur e. Such sta

tements are not g enerally r

egard ed as a va lid basis f or an ac tion for f

raud and deceit. Fowler Happy Goodman F

amily , Tenn. 1978, 575 S.W.2d 496. Young v. Cooper , 30 Tenn. App. 55, 203 S.W.2d 376.
To establish a cause of action for neg ligent misrepresentation, the statement must be of a material past or present fact. Statements of opinion or intention, puffing sales talk, or conjecture or representation of future events are not actionable even though the y may later-12-

prove to be false. McElroy v. Boise, Cascade Corporation , Tenn. App. 1982, 632 S.W.2d 127.
Neither the Plaintiff nor this Defendant questions the correctne ss of the $50,000 judgment. This Court will therefore not disturb it. However, the recor d does not support any increase in the judgment as urged by the Plaintiff.
The judgment of the Trial Court is affirmed. Costs of this appeal are assessed to the appella nt. The c ause is r

emanded to the Tri al Court f

or any necessa ry further procedu res.

AFFIRMED AND

REMANDED.

_______________________________________ HENRY F. TODD PRESIDING

JUDGE, MIDDL

E SECTION

CONCUR:

___________________________ SAMUEL L . LEWIS, JUDGE

___________________________ BEN H. CANTRELL , JUDGE