# FILED October 2, 1996 Cecil Crowson, Jr. App ellate C ou rt Clerk I N THECOUR

TOFAPPEALS

RI CH A RD BRI G G Sa n d) KNOX C I R C UI T STEPHANI ER. BR

I GGS , ) C. A . N O . 03A 01- 9603- C

V - 00115 ) ) Pl a i ntif f s - A pp e lla nt s ) ) ) ) ) ) vs . ) HON. DALEC. W OR KM AN ) J UDGE ) ) ) ) ) R I VER S OUND LI M

I TED PAR

TNER SHI P, ) R

EVER SED AND R

EM ANDED W I LLI AM S . NI X d/ b/ a W

SN ) EN TER PR I SES , G

EN ER A L PA R TN ER , ) a n dDAR

YLW AGNER , ) ) D

e f e n d a nt s - A

pp e l l ees )

D A V I D N . G A R ST, Le w

i s , K i n g , K r i e g& W a l dr op , P . C. , K

n o x v ille f or a pp e l l a nt . DAVI D E. SM I TH , H odge s , D

ought y &

Ca r s on, K

noxvi l l e , f or A

pp e l l ee.

O PI N I O N

Mc Mur r a y , J .1 A s e t t l e m

e n t agr e e m

e n t w a s r e a c h e d w

i t h t h e A

l b e r s , and a vol unt a r y nons u i t wa s ent e r e d aga i n s t D o n D unc a n , d/ b / a Fr ont i e r H o m e I n s p e c t i ons , w ho i n s p e c t e d t h e h o m e f o r t h e Br i g g s pr i o r t o t h e i r p u r c h ase. 2 The s i n g l e i s s u e i nt hi s cas e i s w h e t h e r a r e m

o t e pur c h a s e r of a hom

e m a y m a i nt a i n a ne gl i ge nc e a c t i on a ga i ns t t he bui l de r of t he hom

e de s pi t e a l a c k of c ont r a c t ua l pr i vi t y. The t r i a l c our t gr a nt e ds um

m a r y j udgm

e nt i n f a vor of t he de f e nda nt a nd t hi s a ppe a l r e s ul t e d. W

e r e ve r s e t he j udgm e nt of t he t r i a l c our t . The Pl a i nt i f f s , D r . a n dM

r s . R i c h a r d M

. Br i ggs , pur c ha s e d a c ondom i ni um f r om t he D e f e nda nt s , M

r . a nd M

r s . Edw

a r d S . A

l be r s i n Apr i l 1993. 1D

a r yl W a gne r C

ons t r uc t i on C

o. bui l t t he hom

e i n 1989. The c ondom

i ni um w a s a pa r t of a de ve l opm e nt by R

i ve r s ound Li m

i t e d Pa r t ne r s hi p, W

illia m S . N i xd/ b/ a W

SN Ent e r pr i s e s , G

e n e r a l Pa r t ne r . The Br i ggs ' na m

e d t he s e pa r t i e s a s de f e nda nt s , a l l e gi ng ne gl i ge nc e i nt he c ons t r uc t i on a dm i ni s t r a t i on, s upe r vi s i on, i ns pe c t i on a nd act u a l c ons t r uc t i on of t he hom e . Spe c i f i c a l l y, t he pl a i ntif f s c l a i m t ha t t he i r hom

e w a s da m a ge d due t o a l e a ky b a s e m e nt, w hi c h wa s ca us e d by be l ow gr a de hol e s i n t he ba s e m e nt w a l l s a ndth e g e ne r a l f a i l ur e of t he c ont r a c t or t o i ns t a l l a de qua t e w a t e r pr oof i ng o f t he b a s e m

e nt . The C i r c uit C

o ur t f or K

nox C ount y gr a nt e d s um m a r y j udgm

e nt to R i ve r s oundLi m

i t e d , W

SN a nd D

a r yl W a gne r C

ons t r uc t i on, f i ndi ng " t h a t t h e Pl a i nt i f f s h a v e n o t s t a t e da cau s e o f act i o nag a i n s t3

t he s e de f e nda nt s be c a us e t he C our t f i nds t he y ow e d no dut y t o a r e m o t e pur c ha s e r of a bui l di ng t he y c ons t r uc t e d t o e xe r c i s e due car e i n t he c ons t r uc t i on t o pr e ve nt s ubs e que nt da m a ge t o or de t e r i or a t i on of s a i d pr ope r t y. "

The Br i ggs ' a ppe a l a nd pr e s e nt t he f ol l ow i ng i s s ue f or our c ons i de r a t i on:

W he t he r anow

ne r of a r e s i de nc e w ho l a c ks pr i vi t y w i t h t he bui l de r t he r e of m a y m a i nt a i n a n a c t i on a ga i ns t t he bui l de r f or ne gl i ge nc e i n t he c ons t r uc t i on of t he r e s i de nce.

Becau s e t he t r i a l c our t ba s e d i t s de c i s i on on a que s t i on of l a w , our s c ope of r e vi e w i s de novow

i t h no pr e s u m

pt i on of c or r ect n e s s f or t he t r i a l c our t ' s c onc l us i o n . A d a m s v . D

ean R oof i ngCo . , 715 S . W . 2d 341 ( Te nn. Ap p . 1986) ; Billing t o nv . C r ow de r , 553 S . W

. 2d 590 ( Te nn. A

pp. 1977) . The Pl a i nt i f f s ' ar g u e t h a t s i n ce t hi s i s a ne g l i g e nce cl a i m , pr i vi t y i s not r e qui r e d t o m a i nt a i n t hi s a c t i on unde r Te nne s s e e ' s a nti- pr i vitys t a t ut e , c odi f i e d a t Te nne s s e e C ode A nnot a t e d § 29- 34- 104, w hi c h s t a t e s :

Pr i vi t yno t requi red. - - I nal l cau s e s o f act i o nf or pe r s ona l i nj ur y or pr ope r t y da m a ge br ought on a c c ount of ne gl i ge nc e , s t r i c t lia b ilityor w a r r a nt y , in c l u di n g4

act i o n s br ought unde r t he pr ovi s i ons of t he U ni f or m C o mme r c i a l C

ode , pr i vi t y s ha l l not be a r e qui r e m e nt t o m a i nt a i ns a i da c tio n . We a gr e e w

iththe Pl a i ntif f s ' c o nt e ntio nth a t s i nc e the y a l l e g e dpr ope r t y da m a ge t o t he i r hom

e as a r e s u l t o f n e g l i g e nce o f t he de f e nda nt s , pr i vi t y i s not r e qui r e d unde r t he s t a t ut e . A l t houghtr a dition a llythi s st a t ut e h a s b eenas s o c i a t e dw i t h pr oduc t lia b ilitya c tio n s , its p l a i nla n g u a g e inn ow a ylim its its a ppl i c a t i on i n a w a y t ha t w

oul d pr e c l ude i t f r om be i ng a ppl i e d t o s ubs e que nt pur c ha s e r s of a r e s i de nc e . Thi s C our t ha s pr e vi ous l y a ddr e s s e d t hi s i s s ue i n R e dbud C oope r a t i ve C

or p. v. C

l a y t o n , 700 S . W

. 2d 551 ( Te nn. A

pp. 1985) . I n R e dbud , a hom

e ow ne r ' s a s s oc i a t i on a ndi ndi vi dua l hom e ow ne r s s ue d a de ve l ope r ove r dr a i na ge pr obl e m s . The C

our t a f f i r m

e d t he a w

a r d of da m a ge s a ga i ns t t he de ve l ope r on a ne gl i ge nc e t he or y, e ve n t hough t he r e c or d s how

e d t ha t s om

e hom e ow ne r s w e r e s ubs e que nt pur c ha s e r s a nd t hus l a c ke d pr i vi t y w i t h t he de ve l ope r . The C our t f ound t ha t s i n c e t he j udgm

e nt c oul d be su s t a i ne d ba s e d upon a ne gl i ge nc e t he or y , the a nt i

- pr i vi t ys t a t ut e a pp l i e d . I d . a t 559.

Our Supr e m

e C our t ha s r eco g ni zedt h e exi s t e nce o f cer t a i n i m p lie dw

a r r a nt i e s of ne w

l y c ons t r uc t e d hom e s i n D

i xon v. M

ount a i n C ityC ons t r uc t i on C

o . , 632 S . W

. 2d 538 ( Te nn. 1982) . The C our t5

lim ite dth o s e w

a r r a ntie s tothe initia l pur c h a s e r s a n d lim ite dto act i o n s on a ni m

pl i e d w

a r r a nt y t he or y. Thi s cas e , h o w e v e r , i s n o t a w a r r a nt ycas e but i s ba s e dupon ne gl i ge nc e . I n vi e w of t he a nt i

- pr i vitys t a t ut e s e t ab o ut ab o v e , w e s ee nor eas o npr i vi t y s houl d be r e qui r e dt o m

a i nt a i n a n a c t i on f or ne gl i ge nc e . W e hol d t h a t a s ubs e que nt pur c ha s e r m a y m a i nt a i n a ne gl i ge nc e a c t i on a ga i ns t t hos e wh oco n s t r u c t e da r e s i de nce, i f t h e de f ect s cl a i m e dt oh a v e cau s e d t he i nj ur y a r e l a t e nt one s , not know n or r e a s ona bl y di s c ove r a bl e t o e ithe r t he pr e vi ous ow ne r s or oc c upi e r s , o r t he s ubs e que nt pur c ha s e r . Si nc e pr e vi ous ow ne r s m a y c a us e da m

a ge t ha t a s ubs e - que nt pur c ha s e r m i ght m i s t a ke nl y a t t r i but e t o t he bui l de r , or w or s e n a c ondi t i on c a us e d by t he bui l de r , w e be l i e ve i t onl y f a i r t or e qui r e l a c k of know l e dge by t he pr e vi ous ow ne r f or t he s ubs e que nt p ur c h a s e r s t os t a t e a cl a i m f or n e g l i g e nce as t ot h e bui l de r . W e do not be l i e ve t ha t our de c i s i on t oda y a nd t ha t i n R e dbud c ont r a di c t s in a ny w a y t he D

i xoncas e . A

l t h o u g ha cl a i m

o f ne gl i ge nc e i n t he c ons t r uc t i on of a hom e i s s i m

i l a r t oa cl a i m unde r a n i m

pl i e d w

a r r a nt y, t he r e a r e di f f e r e nc e s t ha t di s t i ngui s h t he t w o. The Supr e m

e C our t of C

ol or a do di s c us s e d t he di f f e r e nc e s b e t w eenthe tw

othe or i e s in C

os m opol i t a n H

om e s , I nc . v. W

e l l e r , 663 P. 2d 1041 ( C

ol o. 1983) ( e n ba nc ) :6 S om e ove r l a p i n e l e m e nt s of pr oof of s uc h a c t i o n s ma yoc c ur , but t he s c ope of dut y di f f e r s a nd t he ba s i s f or lia b ilityis di s ting ui s h a b l e . Th e im p lie dw

a r r a nt y of ha bi t a bi l i t y a nd f i t ne s s a r i s e s f r om t he c ont r a c t ua l r e l a tio nbe t w

e e n t he bui l de r a nd t he pur c ha s e r . Pr oof of a de f e c t due t o i m pr ope r c ons t r uc t i on, de s i g n , or pr e p a r a tio nis s u f f i c i e nt toe s t a b lis hlia b ilityinthe bui l de r - ve ndor . N e gl i ge nc e , how

e ve r , r e qui r e s t ha t a bui l de r or c ont r a c t or be he l d t oa s t a nda r d of r eas o n a b l e car e i n t he c onduc t of i t s dut i e s t o t he f or e s e e a bl e us e r s of t he pr o p e r t y . . . . N e g lig e n c e intor t m u s t e s t a b lis hde f e c t s i n w or km a ns hi p, s upe r vi s i on, or de s i gn a s a r e s pons i bi l i t y of t he i ndi vi dua l de f e nda nt . Pr oof of de f e c t a l one i s not e noughtoe s t a b lis hthe c l a i m . For e s eeabi l i t yl i m i t s t he s c ope of t he dut y, a nd t he p a ssa g e of t i m

e f ol l ow

i ng c ons t r uc t i on m a ke s c a us a t i on di f f i c ul t t o pr ove . W e lle r a t 1 04 5 ( c ita tio n s o m itte d ) . We a l s o f i nd a m

pl e s uppor t f or our de c i s i on f r om num e r ous ot he r jur i s di c t i o n s . Se e Br ow n v. Fow

l e r , 279 N

. W . 2d 907 ( S . D

. 1979) ( s ubs e que nt pur c ha s e r s m a y s t a t e a c l a i m f or ne gl i ge nc e a g a i n s t a bui l de r , a l t hough i m pl i e d w

a r r a nt i e s do not e xt e nd be yond t he fi r s t p ur c h a s e r); W r i ght v . C

r e a tiv e C

or p . , 498 P . 2d 1179 ( C ol o. A pp. 1972) ( s ubs e que nt pur c ha s e r s c oul d m a i nt a i n a c t i on f or ne gl i ge nc e , but not i m pl i e d w

a r r a nt y of m

e r c ha nt a bi l i t y) ; C obur n v. Le nox H

om e s , I nc . , 173 C

onn. 567, 378 A

. 2d 599 ( 1977) ( s ubs e que nt pur c ha s e r s m

a ys t a t e a cl a i m i nn e g l i g e nce f or l a t e nt de f ect s , a l t houghthe im

p lie dw

a r r a nt y doe s not e xt e nd t o t he m ) ; Pa r l i a m

e nt To w e r s C ondom i ni um v. Pa r l i a m

e nt H o u s e R eal t y , I n c . , 377 So. 2d976 ( Fl a . A

pp. 1979) ( pr i vi t y not r e qui r e d f or ne gl i ge nc e a c t i on a ga i ns t7

bui l de r or a r c hi t e c t , but i s r e qui r e d f or br e a c h of i m pl i e d w a rra nt y ) ; N

a vaj o C

i r c l e , I nc . v. D

e ve l opm

e nt C onc e pt s C

or p ., 3 7 3 So. 2d 689 ( Fl a . A pp. 1979) ( l a c k of pr i vi t y doe s not a f f e c t a t or t c l a i m s o l ong a s t he p l a i ntif f canes t a b l i s ht h e exi s t e nce o f a dut y) ; Si m

m ons v. Owe n s , 363 S o. 2d 142 ( Fl a . A pp. 1978) ( s ubs e que nt pur c ha s e r c a n m

a i nt a i n ne gl i ge nc e a c t i on a ga i ns t bui l de r f or l a t e nt de f ect s not di s c ove r a bl e by r e a s on a b l e i ns pe c t i on) ; M c D onough v. W h a l e n , 313 N

. E. 2 d 435 ( M

a s s . 1974) ( bui l de r / c ont r a c t or m a y be lia b l e f or i nj ur i e s or da m a ge c a us e d by hi s ne gl i ge nc e t o pe r s on w ithw hom he ha s no c ont r a c t ua l r e l a t i ons hi p) ; K e ye s v. G

uy Ba i l e y Ho m e s , Inc . , 439 So. 2d 670 ( M i s s . 1983) ( bui l de r / ve ndor m a y be lia b l e on ba s i s of ne gl i ge nc e or br e a c h of i m pl i e d w

a r r a nt y t o s ubs e que nt pur c ha s e r s de s pi t e l a c k of pr i vi t y) ; Le i gh v. W a ds w or t h , 361 P. 2d 849 ( O

kl a . 1961) ( l a c k of pr i vi t y doe s not ba r r e c ove r y a g a i n s t bui l de r f or c ondi t i ons i m m e di a t e l yda nge r ous ) ; Te r l i nde v. N eel y , 275 S . C. 395, 271 S . E. 2d 768 ( 1980) ( s ubs e que nt pur c ha s e r s ma yas s e r t a cl a i m f or l a t e nt de f ect s un de r ei t h e r i m p l i e dw

a r r a nt y or ne gl i ge nc e t he or i e s ) ; M oxl e y v. La r i m

e e Bui l de r s , I n c . , 600 P. 2d 733 ( W yo. 1979) ( s ubs e que nt pur c ha s e r s m a y s ue f or br e a c h of i m pl i e d w a r r a nt yas w

e l l as s t a t e a cl a i m i nn e g l i g e nce) . We do not be l i e ve t ha t pe r m i t t i ng a c t i ons a ga i ns t bui l de r s b a s e don ne gl i ge nc e w i l l s ubj e c t t he m

t o undue ha r ds hi ps . The the G e ne r a l A

s s e m bl y ha s i m

pos e d a f our ye a r s t a t ut e of l i m i t a t i on on8

m a i nt a i ni n ga c t i ons a ga i ns t de ve l ope r s . Te n n. C ode A nn. § 28- 3- 202. Thi s l i m

i t a t i on w

oul d a ppl y t o c l a i m s ba s e d on ne gl i ge nc e s u c has t h a t pr e s e nt e di nt hi s cas e .

I t s houl d be e m

pha s i z e d t ha t our de c i s i on i s pr e di c a t e d upon t hi s be i ng a n a c t i on f or ne gl i ge nc e . W e do not a ddr e s s w he t he r r e m ot e pur c ha s e r s ha ve a c a us e of a c t i on a ga i ns t de ve l ope r s unde r a nyot he r t he or y, a nde m pha s i z e t ha t unde r t he D i xoncas e onl y t he i nitia l p ur c h a s e r m a ym a i nt a i n a n a c t i on unde r a n i m pl i e dw

a rra nt y t he or y. N

or do w

e a ddr e s s t he a de qua c y of Pl a i nt i f f s ' pr oof r e ga r di ngt he a l l e ge d ne gl i ge nc e of t he de f e nda nt s . H ow e ve r , s umma r yj udgm

e nt i s onl y t o be r e nde r e d by a t r i a l c our t w he n i t i s s h o w nt h a t "t h e r e i s n og e nui n e i s s u e as t oanym a t e r i a l f act and t h a t t he m

ovi ng pa r t y i s e nt i t l e d t o j udgm e nt a s a m

a t t e r of l a w

. " T. R. C. P. 56. 03. I n r ul i ng on a m ot i on f or s um

m a r yj udg m

e nt, th e t r i a l c our t a nd t he C our t of A

ppe a l s m

u s t c o n s i de r the m a tte r in t he s a m

e m a nn e r as a m

o t i o nf or a di r ect e dv e r di c t m a de at t h e c l o s e of t he pl a i nt i f f ' s pr oof , i.e . , a ll the e v i de n c e m u s t b e v i e w e dinthe light m o s t f a vor a bl e t o t he oppone nt of t he m ot i on a nd a ll l e gi t i m

a t e c onc l us i ons of f a c t m us t be dr a w

n i n f a vor of t he oppone nt . I t i s onl y w he n t he r e i s no di s put e d i s s ue of m a t e r i a l f a c t t ha t a s um m a r y j udgm

e nt s houl d be gr a nt e d by t he t r i a l c our t a nd s us t a i ne d by t he C our t of A

ppe a l s . Gr a v e s v . A nc hor W

i r e C or p. of Te nne s s e e , 692 S . W . 2d 4 20 ( Te nn. A

pp. 1985) ;9

Be nne t t v. M

i d- S out h Te r m

i na l s C

or p. , 660 S . W

. 2d 799 ( Te nn. A

pp. 1 983) . Sum

m a r y j udgm

e nt i s ge ne r a l l y i na ppr opr i a t e i n a t o r t a c t i o n . Bow

m a n v. H

e na r d , 547 S . W

. 2d 527 ( Te nn. 1977) . Si nc e w e c onc l ude th a t the p l a i ntif f w a s e ntitle dtom a i nt a i na na c tio n a g a i n s t t he de f e nda n t s , i t f ol l ow s t ha t s um

m a r y j udgm

e nt w a s not a ppr opr i a t e i n t hi s c a s e . We r e ve r s e t he j udgm e nt of t he t r i a l c our t a nd r e m a nd t he cau s e t o t he t r i a l c our t f or s uc h ot he r a nd f ur t he r a c t i on t ha t m a y be r e qui r e d i n c onf or m i t y w i t h t hi s o pi ni on. C os t s a r e t a xe d t o t he app e l l ees .

______________________________ D on T. M

c M ur r a y, J . CONC UR:

___________________________________ H ous t on M

. G odda r d, Pr e s i di ng J udge

___________________________________ C ha r l e s D

. Sus a no, J r . , J udgeI N THECOUR TOFAPPEALS

RI CH A RD BRI G G Sa n d) KNOX C I R C UI T STEPHANI ER. BR

I GGS , ) C. A . N O . 03A 01- 9603- C

V - 00115 ) ) Pl a i ntif f s - A pp e lla nt s ) ) ) ) ) ) vs . ) HON. DALEC. W OR KM AN ) J UDGE ) ) ) ) ) R I VER S OUND LI M

I TED PAR

TNER SHI P, ) R

EVER SED AND R

EM ANDED W I LLI AM S . NI X d/ b/ a W

SN ) EN TER PR I SES , G

EN ER A L PA R TN ER , ) a n dDAR

YLW AGNER , ) ) D

e f e n d a nt s - A

pp e l l ees )

O RDE R Thi s app eal cam

e on t o be he a r d upon t he r e c or d f r om t he C i r c ui t C

our t of K

nox C ount y, br i e f s a nd a r gum e nt of c ouns e l . U pon c ons i de r a t i ont he r e of , t hi s C our t i s of t he opi ni on t ha t t he r e w a s r e v e r s i b l e e r r or inthe tr i a l c o ur t . We r e ve r s e t he j udgm e nt of t he t r i a l c our t a nd r e m a nd t he cau s e t o t he t r i a l c our t f or s uc h ot he r a nd f ur t he r a c t i on t ha t m a y11

be r e qui r e d i n c onf or m i t y w i t h t hi s op i n i o n . C o s t s ar e t a x e dt o t he app e l l ees . PER CU RI A M