Court Opinion

ID: 5057035
Source: CourtListenerOpinion
Date Created: 2021-10-01 08:45:51.629581+00
Date Added: 2024-06-11T08:19:15.814258
License: Public Domain

OPINION
FONES, Justice.
Coy Rose and wife brought this suit to rescind a sewer line easement granted to the City of Covington on the grounds of misrepresentation and for damages pursuant to the inverse condemnation statutes.
The trial court approved a jury verdict setting aside the easement upon a finding of misrepresentation and awarding a total of $17,500 in damages for reverse or inverse condemnation. The Court of Appeals reversed and remanded for a new trial upon the theory of negligent misrepresentation only. In this Court, plaintiff landowners insist that the Court of Appeals was in error in finding that rescission of the easement was not available to them, under the facts of this case, and seek to have the jury verdict reinstated.
The landowners’ proof was to the effect that the city attorney represented to them that the fifteen foot easement would run along their western boundary line, from the westernmost point on Hill Street to the north line of their property; that, in fact, the sewer line ran at an angle approximate twelve degrees east of north, traversing their property a distance of approximately 232 feet, and crossed their north line sixty-*269eight feet east of the northwest corner of their northernmost line.
The landowners testified that they were willing to and did give the city the easement upon their understanding that the sewer line continued north as an extension of their western property line, as it runs northward from Hill Street, because they would have sustained no damage to the remainder of their property with the easement in that location. Upon learning the true course of the sewer line during construction of the easement, plaintiffs assert that it became apparent to them that the easement had diminished the value of their property in several respects, notably in restricting the area available for construction of future buildings.
The trial court submitted to the jury the issue of whether or not the landowners were entitled to a rescission of the easement deed, and if so, instructed the jury to assess damages for inverse condemnation.
The Court of Appeals held that the easement was not subject to rescission because landowners did not act promptly upon discovery of the alleged wrong, and their actions between September 1977, when they learned of the location of the easement, and August 1978, when suit was filed, were inconsistent with the assertion of the remedy of rescission, citing Gibson’s Suits in Chancery, 5th edition, § 993 and numerous cases.
While we agree with the Court of Appeals, there is an even more compelling reason why rescission is not available here. The City of Covington was entitled to the easement over plaintiff’s property at the location described in the easement deed in the exercise of its right of eminent domain and the sewer line was constructed within the easement granted. The object of rescission is to return the parties to status quo, which obviously cannot be accomplished in these circumstances.
The Court of Appeals concluded that the issue of negligent misrepresentation was implicitly viable in the pleadings and proof but that neither the elements necessary for liability nor the measure of damages under that theory of recovery had been properly charged. We agree. The City of Coving-ton did not file an application for permission to appeal and their briefs in this Court implicitly concede that plaintiffs are entitled to a new trial on the theory of negligent representation.
If the jury finds the city liabile for negligent misrepresentation, plaintiff’s damages under the benefit of the bargain rule, will be the difference between (1) the value of the easement located where they understood it to be when they signed the deed, and the damage, if any, that it would have caused to the property remaining after the taking, and (2) the value of the easement located as called for in the deed, and the incidental damages to the remainder, if any. See Haynes v. Cumberland Builders, Inc., 546 S.W.2d 228 (Tenn.App.1976), and cases cited therein.
Of course, the appellate courts having denied rescission, plaintiffs may also claim any damages predicated on the express terms of the easement contract. Also, the parties and the court should consider whether or not T.C.A. § 29-20-205(6) is applicable to this case and if so, its legal effect.
The judgment of the Court of Appeals is affirmed and this case is remanded to the Circuit Court of Tipton County for a new trial. Costs in this Court are adjudged against plaintiff.
HARBISON, C. J., and COOPER, BROCK and DROWOTA, JJ., concur.