FILED

June 26, 1998

Cecil Crowson, Jr.

Appellate C ourt Clerk

 IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

DAVID A. WILHOITE, SR., ET UX., ) C/A NO. 03A01-9801-CH-00004

)

Plaintiffs-Appellants, ) COCKE CHANCERY

)

v. ) HON. CHESTER S. RAINWATER, JR.,

) CHANCELLOR

NINA B. PROFFITT, ET AL., )

) AFFIRMED AND

Defendants-Appellees. ) REMANDED

JAMES M . CRAIN, Knoxville, for Plaintiffs-Appellants.

CLYDE A. DUNN, Newport, JAMES McSWEEN and FRED HOLT, McSWEEN &

McSWEEN, Newport, and JAMES RIPLEY, SHARP & RIPLEY, Sevierville, for

Defendants-Appellees.

O P I N I O N

Franks, J.

In this action plaintiffs sought rescission of the purchase of a motel or

damages, based upon alleged fraudulent misrepresentations during negotiations for the

purchase. Plaintiffs sued the owners, a real estate firm, Barbara’s Real Estate, and the

Trustee. On September 8, 1994, plaintiffs agreed to purchase the property and

received a deed to the property on September 13, 1994. They elected not to make any

payments on their loan and the property was foreclosed in Novembe r, 1995. This

action was filed prior to foreclosure on February 7, 1995.

Defendant Barbara’s Realty filed a motion for summary judgment which

was ultimately granted by the Trial Judge. The gravamen of plaintiffs’ complaint was

that when they first contacted a representative of Barbara’s Realty on July 22, 1994,

they were advised by the representative that there would be new highway construction,
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making the highway “coming by the motel” into four lanes which would be completed

in two to three years. The existing highway at that time comprised two lanes. After

the sale was consummated, plaintiffs contacted the State Highway Department and

determined that while there were plans to build a four lane highway in the vicinity, the

planned highway did not go by the motel.

Barbara’s Real Estate essentially argued in their motion that the

representations did not constitute actionable fraud, citing Oak Ridge Precision v. First

Tennessee Bank, 835 S.W.2d 25 (Tenn. App. 1992). We agree for reasons hereinafter

set forth.

Subsequent to the grant of the summary judgment, plaintiffs amended

their complaint to state that they had inquired of Barbara’s representative about the

financial records of the motel, in order that they could judge the profitability of the

operation, and they were advised that the motel had been “shut down for the

proceeding two years” and consequently there were no records available, when in fact

the motel had been in operation. After the trial, the Chancellor, without a jury, found

that the evidence did not “sustain fraud” on the part of the defendants. The Judge

said: 

This Court finds that the plaintiffs have wholly failed to sustain or show

by a preponderance of the evidence, any evidence of fraud on the part of

these defendants or any one of these defendants. The manner was

handled completely above board. The parties had available to them any

and all knowledge that a reasonable and responsible person would seek,

and had the me ans of obtaining it if they had so seen fit, and they can’t

come in a t a later date and seek to have something set aside because , in

retrospect, it appears to be an unwise decision on their part.

The evidence doe s not preponderate against the Chancellor’s finding, T.R.A.P. Rule

13(d). 

We note that the real estate agent allegedly making the representations

to plaintiff was Tom Goolsby, and plaintiff testified that he contacted Mr. Goolsby,
1

The multiple listing agent for the sale of the motel was ERA Pioneer Realty of Sevierville.

3

and plaintiff further characterized Mr. Goolsby as “our real estate agent”.1

 He further

elaborated:

[W]e authorized him to present the offer and negotiate the transaction

for the motel.

The record demonstrates that plaintiffs essentially made no independent investigation

or checks on the motel property prior to purchase. Plaintiff David Wilhoite explained:

I’ve gone through a lot of real estate transactions in California, and I had

done research and had been very successful at buying and selling real

estate, and always made money. But as I was making preparations to

come home, I pretty much let my guard down thinking I was dealing

with good handshake people. . . .

As to plaintiffs’ contention that the agent fraudulently misrepresented that the motel

had not been in operation in the last two years, the record establishes that plaintiff

could have readily ascertained the motel had, in fact, been in operation. Moreover, the

evidence preponderates that this statement was not an inducement to plaintiffs’

purchasing the motel. As for the representation as to the location of a new four lane

highway, the record also shows that this information could have been readily

ascertained by plaintiff, which was demonstrated by the fact that the plaintiff readily

obtained information as to the location shortly after purchasing the motel. 

We believe the Rule set forth in Winstead v. First Tennessee Bank, N.A.,

Memphis, 709 S.W.2d 627 (Tenn. App. 1986) controls. There, this Court said:

[W]here the means of information are at hand and equally accessible to

both parties, so that with ordinary prudenc e or diligence, they might rely

on their own judgment, generally they must be presumed to have done

so, or, if they have not informed themselves, they must abide the

consequences of their own inattention and carelessness. Unless the

representations are such as are calculated to lull the suspicions of a

careful man into a complete reliance thereon, it is not commonly held, in

the absence of special circumstances, that, where the means of

knowledge are readily available, and the vendor or purchaser as the case

may be, has the opportunity by investigation or inspection to discover

the truth with respect to matters concealed or misrepresented, without
4

prevention or hindrance by the other party, of which opportunity he is or

should be aware, and where he nevertheless fails to exercise that

opportunity and to discover the truth, he cannot, thereafter assail the

validity of the contract for fraud, misrepresentation or concealment with

respect to matte rs which should have been ascertained. . . .

709 S.W.2d at 633.

We affirm the Chancellor’s finding that plaintiffs failed to establish

actionable fraud by a preponde rance of the evidence. 

We have considered all issues raised by the plaintiffs, find them to be

without merit, and affirm the judgment of the Trial Court and remand with costs of the

appeal assessed to appellants.

__________________________

Herschel P. Franks, J.

CONCUR:

___________________________

Don T. McMurray, J.

___________________________

Charles D. Susano, Jr., J.