FILED

August 7, 1996

Cecil W. Crowson

Appellate Court Clerk

JENNIFER FRANK )

)

Plaintiff/Appellant, )

) Davidson Circuit

) No. 89-1861-I (III)

VS. )

) Appeal No.

) 01A01-9601-CH-00044

ALI NOUREDDINI and wife, ) 

OLIFATE NOUREDINNI, )

NATIONAL HOMES, INC., AMERICAN )

REALTY COMPANY, TERRY )

STEPHENS, LEE ANN HOFFMAN, )

BANC PLUS MORTGAGE )

CORPORATION, EXCELLA MORTGAGE)

CORPORATION, SHIRLEY ADKINS, )

ALAN SATURN AND THE U.S.A. )

INSURANCE CORPORATION OF NEW )

YORK, D/B/A TITLE U.S.A., )

)

Defendants/Appellees. )

IN THE COURT OF APPEALS OF TENNESSEE

MIDDLE SECTION AT NASHVILLE

APPEAL FROM THE CHANCERY COURT OF DAVIDSON COUNTY

AT NASHVILLE, TENNESSEE

HONORABLE ROBERT S. BRANDT, CHANCELLOR

Sherrie L. Durham #13224

111 West Division Street

Mt. Juliet, TN 37122

ATTORNEY FOR PLAINTIFFS/APPELLANTS

Fred Cowden #2469

211 Third Avenue North

Nashville, TN 37201

ATTORNEY FOR DEFENDANT/APPELLEE

Cornelius & Collins

C. Bennett Harrison, Jr. #5702

Suite 2700 Nashville City Center

P.O. Box 190695

Nashville, TN 37219-0695

ATTORNEY FOR DEFENDANT/APPELLEE

Michael J. Philbin #2897

One Union Street

P.O. Box 198169

Nashville, TN 37219-8169

ATTORNEY FOR DEFENDANT/APPELLEE
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AFFIRMED AND REMANDED.

HENRY F. TODD

PRESIDING JUDGE, MIDDLE SECTION

CONCUR:

SAMUEL L. LEWIS, JUDGE

BEN H. CANTRELL
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JENNIFER FRANK )

)

Plaintiff/Appellant, )

) Davidson Circuit

) No. 89-1861-I (III)

VS. )

) Appeal No.

) 01A01-9601-CH-00044

ALI NOUREDDINI and wife, ) 

OLIFATE NOUREDINNI, )

NATIONAL HOMES, INC., AMERICAN )

REALTY COMPANY, TERRY )

STEPHENS, LEE ANN HOFFMAN, )

BANC PLUS MORTGAGE )

CORPORATION, EXCELLA MORTGAGE)

CORPORATION, SHIRLEY ADKINS, )

ALAN SATURN AND THE U.S.A. )

INSURANCE CORPORATION OF NEW )

YORK, D/B/A TITLE U.S.A., )

)

Defendants/Appellees. )

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 Hoffman, Shirley Adkins

and Alan Saturn; and from a judgment in favor of Plaintiff and against the Defendant, Ali

Noureddini in the amount of $50,000. Other captioned Defendants are not involved in this

appeal.

On January 18, 1989, a contract for Sale of Real Estate was executed describing the

property and terms of sale. Plaintiff was the designated buyer, and signed her name. The

seller was designed as National Homes, but the seller’s signature was N. Homes, Inc., By Ali

Noureddini, (Pres.). The listing broker was designated as American Realty. Pertinent 

provisions of the contract were:

 Purchase price $136,000 payable as follows: Buyer to obtain

70% LTV conventional loan. This contract is contingent upon

Buyer’s ability to qualify for a new loan. Buyer agrees to make

said loan application on or before 1/31/89. 

Sale will be closed upon loan approval and completion of home 
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no later than 3/31/89.

 Seller to furnish garage door (illegible) back yard to railroad

ties. Correct staircase to basement, correct water in basement 

walls.

On April 3, 1989, a Disclosure/Settlement Statement was signed by Plaintiff and

National Homes, Inc.. It contained the following item:

506 Escrow for landscaping: $1,800.00

The original complaint was filed on July 14, 1989, against the captioned Defendants,

alleging that each was guilty of fraudulent inducement of Plaintiff to enter into the contract

and/or close the sale.

On January 29, 1991, the Trial Court entered summary judgments in favor of Olifate

Noureddini, Shirley Adkins and Alan Saturn.

On the same date, January 29, 1991, Plaintiff filed an amended complaint identical

with the first complaint except for a single paragraph #51:

 Defendants Saturn and Noureddini failed to have a 2-10

Home Buyers Warranty issued to the plaintiff at closing

as required by the purchase contract. Although defendant

Saturn was aware of this requirement, he instructed defendant

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 order dismissed U.S.A. Insurance Corporation of New

York .

On June 13, 1994, American Realty Company, Terry Stevens and Lee Ann Hoffman

were dismissed by summary judgment.
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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 presented separately in response to each appellee.

Shirley Adkins

Plaintiff asserts that the summary judgment 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 Ms. Adkins was an appraiser employed by Excella Mortgage Company to

appraise the house in question for purposes of approving a loan to plaintiff secured by a

mortgage on the house. The affidavit of the loan officer of Excella states:

 I arranged for Shirley Adkins, an appraiser in town, to 

appraise the property for Ms. Frank. Ms. Frank paid for the 

appraisal by check.

 Jennifer Frank was not knowledgeable about construction 

and real estate. That is one reason we hired an appraiser: 

to protect the purchaser and the mortgage company. Ms. 

Frank often stated that she did not know anything about 

building houses, but if the appraiser and everyone did their 

job she would be protected. She expressed several times

that she trusted everyone to do their job properly.

 Two or three days before the closing was to take place, 

I received a telephone call from Jennifer Frank. She stated

that she was extremely concerned over water pooling in 

the basement of the house being constructed and requested 

that I communicate that to the appraiser before the final 

inspection.

 I called Shirley Adkins’ office to order a final inspection 

and left a message regarding the water in the basement with 

the secretary or receptionist who answered the telephone. 

I also called Ali Noureddini about the water problem in the 

basement.

 Ms. Frank compiled a “punch list” of minor finishing items 

to be completed or connected. Ms. Frank never mentioned 

any major defects. Based on my experience with Ms. Frank, 

I believe she would have told me if she knew of serious 

construction defects.

 According to the final appraisal report, the house was 

satisfactorily completed except for minor details such as 

landscaping and wallpaper. BancPlus agreed to escrow 
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approximately $1,200.00 to complete the landscaping. 

The mortgage was approved on that basis.

The evidence is uncontroverted that Ms. Adkins was employed by Excella Mortgage

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 had no

obligation to any person or firm except Excella. The mere fact that Excella told Ms. Adkins

that the Plaintiff had certain concerns regarding the house did not impose upon Ms. Adkins

any obligation 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 knowledge 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 (1970), wherein

the Supreme Court held that a surveyor employed by the seller to survey land 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 appraiser had no

cause to believe that her report of the value of the house would be relied upon by the buyer to 

her detriment.

No error is found in the summary judgment dismissing Shirley Adkins.

Alan Saturn

Alan Saturn was designated by Excella Mortgage Company to prepare the necessary

documents for closing the sale, to supervise their proper execution and to properly allocate

and disburse the funds provided by Excella. His fee was paid out of the same fund.

Plaintiff asserts that Mr. Saturn failed to cause a 2-10 Warranty to be issued. This

was a type of insurance policy to indemnify Plaintiff from faults in the house which became
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apparent at least 2 years and not more than 10 years after the closing. The evidence is

uncontradicted that Mr. Saturn retained funds to pay for the policy and that he did pay for the

policy. Moveover, none of the complaints asserted in this case arose at least 2 years after

closing. Plaintiff asserts that Mr. Saturn represented to her that the one-year warranty signed

by the builder was a satisfactory substitute for the 2-10 warranty. All of Plaintiff’s present

complaints are during the first year and were covered by the one year warranty. Even though

the 2-10 warranty may have never been received, it was paid for and enforceable as to any

complaints arising 2 years or more after the closing. For this reason, any misrepresentation as

to warranty coverage was irrelevant to the present dispute.

Plaintiff next asserts that Mr. Saturn effected the closing even though there was an

outstanding judgment lien against the property. The evidence is uncontroverted that the title

policy of the Defendant, U.S.A. Insurance Company of New York protects Plaintiff from loss

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.

Plaintiff complains of various representations made to her by Saturn after the closing,

but the evidence is uncontroverted that the duties of Saturn to Plaintiff were confined to the

closing of the sale and that no actionable representations were made to Plaintiff by Saturn on

the date of closing.

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. In the Trial Court, they filed an

answer and a motion for summary judgment relying only upon the deposition of Plaintiff and

their supporting brief. The brief is not included in the appellant record. The complaint

alleges:

 Mr. Stevens and Ms. Hoffman made material representations to 
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Plaintiff that Ali Noureddini/American Homes, Inc. was an excellent

builder with a solid reputation in the community for home building.

 The plaintiff at all times relied on the superior knowledge and

expertise of defendants Terry Stevens and Lee Ann Hoffman.

 In reality, defendants Stevens and Hoffman’s representations 

about the skill and reputation of Noureddini/American Homes, Inc.

were false.

 Plaintiff alleges that these defendants knew their representations

about Noureddini/National Homes, Inc. were false at the time 

they were made, or, in the alternative, these defendants made

these representations without having made sufficient inquiry and 

without sufficient knowledge as to the truth or falsity of their 

statements.

 During discussions with Terry Stevens and Lee Ann Hoffman,

Mr. Stevens and Ms. Hoffman represented 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, Ali Noureddini and National Homes, Inc., 

the plaintiff entered into a contract for the purchase of the home 

at 1232 Reelfoot Circle.

 As the completion date for the subject home approached, the

Plaintiff expressed concern to defendants Hoffman and Stevens 

as agent for American Realty and National Homes, Inc. that her

home might not be completed in a timely fashion.

 Despite the fact that the defendants American Realty, Terry 

Stevens, Lee Ann Hoffman, National Homes and Ali Noureddini

knew that the subject home was not complete, each repeatedly

urged the plaintiff to go ahead with closing. More specifically,

these defendants represented to the plaintiff that the home was 

ready and suitable for occupancy and that any remaining work

was minor.

 The defendants, American Realty, Terry Stevens, Lee Ann 

Hoffman, National Homes, Inc., and Ali Noureddini, at all times 

material hereto, possess special skill and knowledge regarding 

the construction and sale of real estate.

 The plaintiff in direct reliance on the representations of 

defendants American Realty, Terry Stevens, Ali Noureddini 

and National Homes, inc., agreed to proceed with the closing 

of the subject property.

 The plaintiff last viewed the property the day before closing

and expressed concerns to the defendants Terry Stevens, Lee

Ann Hoffman and Ali Noureddini and employees of the Excella

Mortgage Company about whether the home would be complete

and ready for occupancy by the closing date. These defendants

repeatedly assured plaintiff that everything would be completed
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in the timely and workmanlike manner.

 Although the home was not finished, the defendants, Ali

Noureddini, Terry Stevens, Lee Ann Hoffman, and American 

Realty and Excella Mortgage 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 corrected 

by defendant Noureddini and/or defendant National Homes 

immediately following closing. A copy of said punch list 

is attached hereto as Exhibit C.

 In direct reliance on the representations of Terry Stevens,

Lee Ann Hoffman, American Realty, Ali Noureddini, 

National Homes, Inc., Excella Mortgage and Shirley Atkins, 

the plaintiff closed the loan papers on the home on April 3, 

1989.

 The plaintiff asserts that the defendant American Realty, 

Inc., Terry Stevens, Lee Ann Hoffman, Excella Mortgage 

Corporation, Shirley Adkins, Ali Noureddini, Olifate 

Noureddini, National Homes, Inc., and Shirley Adkins, 

knew or should have known prior to the closing on the 

subject property that no Certificate for Use and Occupancy 

had been issued.

 The plaintiff alleges that the acts of Ali Noureddini, 

individually, and National Homes, Inc., 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 damages.

 Plaintiff alleges that the acts of Ali Noureddini, individually,

and NationalHomes, Inc., Terry Stevens, Lee Ann Hoffman, 

Shirley Adkins, and Alan Saturn constitute negligent 

misrepresentation.

 Plaintiff alleges that defendants Ali Noureddini, National 

Homes, Inc., Terry Stevens, Lee Ann Hoffman, Alan Saturn 

and American Realty, Inc., knew that her home was not ready 

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 

defendants also knew that there were substantial code violations 

causing the subject home to be unhabitable. Despite this 

knowledge, the defendants, and each of them, urged the plaintiff 

to close on the subject home, and conspired to conceal the true 

state of facts from the plaintiff.

 Furthermore, these defendants, and each of them, knew about 

the cloud on plaintiff’s title, yet each of them conspired to 

conceal this fact from plaintiff and persuaded her to close the 
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purchase.

The deposition of Plaintiff consists of two volumes and 418 pages. It has been

reviewed thoroughly. The deposition of Plaintiff shows conclusively that she has no evidence

to support an award of damages against these defendants on any ground alleged in the

complaint.

In summary, Plaintiff contracted with a corporation to buy a house from a corporation

and did close the purchase of the house from the corporation even though it was not

completed to her satisfaction. She says she closed the sale on the advice of her lawyer 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 was foreclosing on

the property. There 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

would be apparent to the purchaser and resulted in the loss of the purchase money.

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 defendants had

knowledge contrary to the opinions expressed to her.

Under these circumstances, summary judgment for these defendants was proper. 

Moman v. Walden, Tenn. App. 1986, 719 S.W.2d 533, Celotex v. Catrett - U.S. - 106 S Ct.

2548, 91 L. Ed 2d 285 (1986). 
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Ali Noureddini

This defendant was the sole stockholder, president and active controller of National

Homes, Inc., from which Plaintiff purchased 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 warranty violation of the Tennessee Consumer Protection Act and

mutual mistake of fact.

As to this defendant, the Trial Court did not grant summary judgment, but considered

all the evidence and entered an order stating:

 [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) from the Defendant

Ali Noureddini.

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

attorneys fees. This Defendant filed no brief in this Court.

Plaintiff’s brief cites no evidence of actual fraud in misrepresenting a present fact, but

relies upon statements of Defendant as to what he would do in the future. Such statements

are not generally regarded as a valid basis for an action for fraud and deceit. Fowler Happy

Goodman Family, 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 negligent 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 they may later
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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 correctness of the $50,000

judgment. This Court will therefore not disturb it. However, the record 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

appellant. The cause is remanded to the Trial Court for any necessary further procedures.

AFFIRMED AND REMANDED.

_______________________________________

HENRY F. TODD

PRESIDING JUDGE, MIDDLE SECTION

CONCUR:

___________________________

SAMUEL L. LEWIS, JUDGE

___________________________

BEN H. CANTRELL, JUDGE