Grogan v. Uggla

• Citation: 535 S.W.3d 864
• Decision Date: 21 November 2017
• Docket Number: No. M2014-01961-SC-R11-CV,M2014-01961-SC-R11-CV
• Parties: Charles GROGAN v. Daniel UGGLA, et al.
• Court: Supreme Court of Tennessee

535 S.W.3d 864

Charles GROGAN

v.Daniel UGGLA, et al.

No. M2014-01961-SC-R11-CV

Supreme Court of Tennessee, AT NASHVILLE.

October 6, 2016 Session

FILED November 21, 2017

Matthew E. Wright, Franklin, Tennessee; and Edmund J. Schmidt III, Nashville, Tennessee, for the appellant, Charles Grogan.

Daniel W. Olivas, Nashville, Tennessee, and Brian S. Faughnan, Memphis, Tennessee, for the appellees, Jerry Black and Pillar To Post, Inc.

Leslie Curry Bay, Nashville, Tennessee; and Harry S. Rosenthal, Ambler, Pennsylvania, for the Amicus Curiae, American Society of Home Inspectors.

Roger A. Page, J., delivered the opinion of the court, in which Jeffrey S. Bivins, C.J., and Cornelia A. Clark, JJ. joined. Holly Kirby, J., filed a separate opinion concurring in part, dissenting in part. Sharon G. Lee, J., filed a dissenting opinion.

In this case, the plaintiff Charles Grogan was injured when he fell from a second story deck that had not been properly constructed but had recently been inspected by the defendant Jerry Black, a home inspector hired by homeowner Daniel Uggla. Defendant Black was a franchisee of defendant Pillar to Post, Inc. The trial court granted summary judgment in favor of the defendants, and the Court of Appeals affirmed the trial court. We granted this appeal to consider as a matter of first impression in this state whether a home inspector is subject to liability for the physical harm suffered by a social guest of the home inspector's client. We conclude that the defendants successfully negated essential elements of the claims of negligent misrepresentation and negligent inspection such that summary judgment was appropriate in this case. Accordingly, the Court of Appeals and the trial court judgments are affirmed.

I. Facts and Procedural History

The basic facts of this case are simply explained. Before Daniel Uggla purchased a home in Franklin, Tennessee, he, through his brother, hired a home inspector to inspect the house. The home inspector noted problems with the deck flooring of the second story deck but not with the railing. As a condition of the sale, the former homeowners replaced the deck flooring. The contractor who replaced the flooring did not work on the deck railing. During a social gathering hosted by Mr. Uggla after moving into the home, the plaintiff fell from the second story deck when the deck railing collapsed, and he sustained severe injuries. A forensic examination of the railing showed that it had been improperly constructed using interior finishing nails rather than galvanized nails. The plaintiff subsequently filed a complaint against the homeowner, the previous owner, the contractor who had replaced the deck boards, the home builder, and the home inspector. The home inspector and the home inspection franchise are the defendants now before us.¹

In the plaintiff's second amended complaint, he alleged that the defendants

knew or in the exercise of reasonable care as a professional inspector should have known that the second floor rear exterior deck railing was constructed with interior finishing nails in violation of local, state[,] and national building codes, and constituted an unreasonable risk of harm since it could not withstand reasonable force to prevent someone from falling from the second floor exterior deck.

The plaintiff further alleged that the defendants "did not perform a pressure test in order to determine the amount of force that the second floor rear exterior deck railing could have withstood in compliance with applicable building codes." Finally, the plaintiff alleged that the defendants "failed to report that the second floor exterior deck railing was negligently constructed in violation of local, state[,] and national building codes and constituted an unreasonable risk of harm" and that their negligence caused the plaintiff's injuries.

In the course of the litigation, Daniel Uggla testified by deposition that he wanted the property inspected "to make sure that everything is okay, up-to-date. If something was not right, I wanted it fixed.... [and to] [m]ake sure it was a good buy as well." He testified that after the inspection, his brother told him that the inspector "recommend[ed] to change the ... deck. Said that he didn't have to. But [the inspector] said it looked old.... [but] [d]idn't ever say it was dangerous." His brother Mike Uggla testified that he wanted to have an inspection to protect against "scenarios of termites ... carbon monoxide ... structural damage ... to make sure you're buying ... a good quality house." He agreed that he relied on the inspector to tell him "what needed to be done."

The defendant home inspector testified in his deposition that his "job is to provide information to [his] client so that they can make an informed decision about the house that they want to buy." He stated that he did not see any visual damage to the deck railings and that the deck railings felt "firm and well anchored." He also stated that if there had been movement, he would have reported it as "a safety risk." The defendant home inspector agreed in response to a question on cross-examination that one purpose of a home inspection is to assure the safety of the occupants of the home. In his report, he noted warping on the deck, and as a result the Ugglas requested that the owners of the home have the deck flooring replaced. The defendant home inspector confirmed that he was not a building codes inspector.

After filing an answer denying all liability, the defendants moved for summary judgment. In the motion for summary judgment, the defendants characterized the plaintiff's claim as negligent misrepresentation and argued that reliance on the home inspection report was a required component of such a claim, a requirement not met by the plaintiff. The defendants added that "as a matter of law, home inspectors do not owe any duty to third parties like Mr. Grogan." The trial court granted summary judgment to the defendants.

The plaintiff appealed to the Court of Appeals and argued that either Restatement (Second) of Torts section 311 (1965) (Negligent Misrepresentation Involving Risk of Physical Harm)² or Restatement (Second) of Torts section 324A (1965) (Liability to Third Person for Negligent Performance of Undertaking)³ provided him a cause of action and that material facts were in dispute such that summary judgment was inappropriate. See Grogan v. Uggla , No. M2014-01961-COA-R3-CV, 2015 WL 5601995, at *4 (Tenn. Ct. App. Sept. 22, 2015), perm. app. granted (Tenn. Feb. 18, 2016). The Court of Appeals rejected the plaintiff's arguments, reasoning that section 324A was not applicable due to the limitations on the scope of a home inspector's duty as defined by the Tennessee Home Inspector License Act, 2005 Tenn. Pub. Acts, c. 65, and the contract between the defendants and their client, Mr. Uggla. Id. at *4-5. The Court of Appeals declined to apply section 311 because it has not previously been adopted in this state. Id . at *6. The Court of Appeals then undertook an analysis of the common law factors for determining whether a duty of care had arisen and concluded that it had not. Id. at *6-7. Finally, the Court of Appeals determined that the facts alleged by the plaintiff to be disputed and material did not affect the conclusion that the defendants did not owe the plaintiff a duty of care. Id. at *8. We accepted plaintiff's application for permission to appeal.

II. Standard of Review

This is an appeal from the trial court's grant of the defendants' motion for summary judgment. As such, we review the trial court's ruling de novo, with no presumption of correctness. Bain v. Wells , 936 S.W.2d 618, 622 (Tenn. 1997). Under Tennessee Rule of Civil Procedure 56.04, summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." We must determine whether the moving party satisfied its burden of production "either (1) by affirmatively negating an essential element of the nonmoving party's claim or (2) by demonstrating that the nonmoving party's evidence at the summary judgment stage is insufficient to establish the nonmoving party's claim or defense." Rye v. Women's Care Ctr. of Memphis, MPLLC , 477 S.W.3d 235, 264 (Tenn. 2015) (emphasis omitted).

III. Analysis

In this case, there is a fundamental disagreement between the plaintiff and the defendants over the cause of the action raised in the complaint. The trial court identified the cause of action as negligent misrepresentation. The trial court granted summary judgment because the defendants affirmatively negated essential elements of the plaintiff's complaint, namely by showing that the plaintiff was not a person for whose benefit the defendants provided information and that the plaintiff did not rely on the defendants' information in any form. The Court of Appeals, however, framed the cause of action in question as one of ordinary negligence, a broader and more general cause of action than negligent misrepresentation, and it relied on the common law factors in its analysis for determining when a duty is owed.

In his second amended complaint, the plaintiff alleged that the defendant home inspector knew or should have known that the deck railing did not meet applicable building codes and "constituted an unreasonable risk of harm since it could not withstand reasonable force to prevent someone from falling"; that the defendant home inspector "did not perform a pressure test"; that the defendant home inspector "failed to report that the second floor exterior deck railing was negligently constructed in violation of local, state[,] and national building codes and constituted an unreasonable risk of harm"; and that these actions were the proximate cause of the plaintiff's injuries.

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