Title: Collins v. Binkley
Citation: 750 S.W.2d 737
Docket Number: N/A
State: Tennessee
Issuer: Tennessee Supreme Court
Date: January 11, 1988

750 S.W.2d 737 (1988) Grover COLLINS, et al., Plaintiffs/Appellees, v. Robert O. BINKLEY, Defendant/Appellant. Supreme Court of Tennessee, at Nashville. January 11, 1988. Rehearing Denied May 31, 1988. W. Gary Blackburn, Barnett &amp; Alagia, Nashville, for plaintiffs/appellees. Douglas Fisher, Howell, Fisher, Branham &amp; North, Nashville, for defendant/appellant. FONES, Justice. This is a suit against an attorney for damages sustained by plaintiffs as purchasers of real property and named grantees in warranty deeds prepared by defendant, who was employed by the grantor. The negligence alleged was the failure to include in the acknowledgement of each deed the words "with whom I am personally acquainted". The trial judge held that an attorney could not be liable for negligence in the performance of professional duties to persons with whom he was not in privity of contract. The Court of Appeals applied the rationale announced by this Court in Tartera v. Palumbo, 224 Tenn. 262, 453 S.W.2d 780 (1970), a case involving a land surveyor, to the action of the attorney in this case and reversed and remanded for trial. We affirm the decision of the Court of Appeals. Defendant admits that the opinion of the Court of Appeals contains a correct statement of the facts necessary to the disposition of this case. We quote the facts from the intermediate court's opinion as follows: This Court recently applied the principles of Tartera in a suit against a law firm and its secretary for alleged negligence in the preparation of warranty deeds and trust deeds and in the performance of other professional responsibilities, in connection with a real estate transaction, wherein the defense was that the attorneys were not in privity of contract with the plaintiffs. Stinson v. Brand, 738 S.W.2d 186 (Tenn. 1987). In an opinion authored by Chief Justice Harbison, the Court said: Id. at 190. In Stinson, the trial court had directed a verdict for defendants upon the ground that plaintiffs were not clients of and were not in privity of contract with the attorneys. In remanding, the Court noted that upon retrial the evidence might support a jury finding that the attorneys intended to charge plaintiffs for preparing the note and deed of trust, or that by naming one of the attorneys as trustees for plaintiffs, the attorneys could be found to have been acting for plaintiffs. However, the Court concluded as follows: Id. at 191. In the case at bar, it is undisputed that the attorney was employed by the seller to prepare the deeds and that no privity of contract existed between plaintiffs and the attorney. However, there was evidence that the attorney knew that plaintiffs would rely upon him and that it was his professional responsibility to prepare a valid warranty deed entitled to registration that would give notice to the world that plaintiffs were the owners of the described real property and that plaintiffs would suffer loss if the acknowledgement was defective. Further, there was evidence that the omission in the acknowledgement was below the standard of care required of an attorney preparing instruments for conveyance of real property. Those are the elements that give rise to the duty of an attorney to non-clients and may result in liability for the damages sustained by non-clients. Plaintiffs insist that the courts below should not have dismissed their action against Mr. Binkley's secretary, Rhonda L. Epperson. Plaintiffs' action against Ms. Epperson was based upon her alleged violation of T.C.A. § 66-22-113. Both the trial court and the Court of Appeals found that plaintiff had failed to carry the burden of proving that Ms. Epperson had violated that statute. We agree with the concurrent finding of the lower courts and affirm the dismissal of plaintiffs' action against Ms. Epperson. The judgment of the Court of Appeals is affirmed and this case is remanded to the trial court for further proceedings consistent with this opinion. Costs are adjudged against plaintiffs. HARBISON, C.J., and COOPER, DROWOTA and O'BRIEN, JJ., concur. Plaintiff has filed a petition to rehear with respect to adjudgment of the costs. We erroneously adjudged the costs against plaintiffs. The last sentence of the opinion to that effect is stricken and we hereby adjudge the costs incurred in this Court against defendants, costs on remand to abide the judgment of the trial court. HARBISON, C.J., and COOPER, DROWOTA and O'BRIEN, JJ., concur. [1] While no question has been raised on appeal as to whether the absence of a showing of the acknowledging officer's personal acquaintance with the grantor renders the acknowledgement void, it has been held in numerous cases that in the absence of such a showing, the acknowledgment is a nullity and so is the registration of the instrument. E.g., Figuers v. Fly, 137 Tenn. 358, 193 S.W. 117 (1916); Bells Administrators v. Lyles, 78 Tenn. 44 (1882); Henderson v. McGhee, 53 Tenn. 55 (1871); Harrison v. Wade, 43 Tenn. 505 (1866).