Lee v. Beach One Props., M2021-00042-COA-R3-CV

CourtCourt of Appeals of Tennessee
Writing for the CourtARNOLD B. GOLDIN, JUDGE
Docket NumberM2021-00042-COA-R3-CV
Decision Date05 April 2022



No. M2021-00042-COA-R3-CV

Court of Appeals of Tennessee, Nashville

April 5, 2022

Assigned on Briefs February 1, 2022

Appeal from the Circuit Court for Trousdale County No. 2019-CV-4792 Clara W. Byrd, Judge

This case involves the purchase of a parcel of real property pursuant to an installment contract for deed. After entering into the contract, the purchaser discovered the existence of a natural gas pipeline easement on the property. The purchaser subsequently brought suit against the seller, arguing an anticipatory breach of contract and a breach of the warranty of title for failure to inform him of the easement. The trial court granted summary judgment in favor of the seller based on its finding that the easement was properly recorded and discoverable through the exercise of ordinary due diligence. On appeal, we affirm.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed and Remanded

Robert P. MacPherson, Lebanon, Tennessee, for the appellant, John J. Lee.

M. Allen Ehmling, Gallatin, Tennessee, for the appellee, Beach One Properties, LLC.

Arnold B. Goldin, J., delivered the opinion of the Court, in which D. Michael Swiney, C.J., and Andy D. Bennett, J., joined.



Background and Procedural History

On February 5, 2016, John J. Lee and Beach One Properties, LLC ("Beach One") entered into a contract for the sale to Mr. Lee of a certain parcel of real property located in Trousdale County, Tennessee. The parties' agreement was set forth in an "Installment Contract for Deed" which contained a "Property Description" section clearly referencing the property being purchased as "Tract 13 of the Parkhurst Subdivision, a plat of which is of record in Plat Book 1, page 10, of the Register's Office for Trousdale County, Tennessee, to which reference is hereby made for a more complete description." Years


prior to the parties entering into this agreement, Texas Eastern Transmission, LP ("Texas Eastern") recorded a valid natural gas easement across the property referenced in the contract. This easement has been a matter of public record in the Register's Office for Trousdale County, Tennessee since at least 1962 and is clearly shown on the plat referenced in the contract.

On July 25, 2019, Mr. Lee filed suit against Beach One, alleging that Beach One had anticipatorily breached its contract with him because the easement on the property "constitute[d] a defect in title that was not contracted for, nor disclosed to," Mr. Lee, and that Beach One had further breached the contract because it "violat[ed] the implied obligation of good faith and fair dealing impressed by law upon all contracts, by contracting to sell property so encumbered by the easement." Mr. Lee contended that, during the course of negotiations concerning the contract, he informed Beach One that he intended to construct a building and residence on the property. Mr. Lee also stated that at no point during the course of negotiations did Beach One inform him of Texas Eastern's easement.[1]

The case was heard in the Circuit Court for Trousdale County on February 3, 2020 upon a motion for summary judgment filed by Beach One. In its February 20, 2020 order, the trial court found that the plat referenced in the "Installment Contract for Deed" "clearly show[ed] the natural gas easement of Texas Eastern[]" and that, "had [Mr. Lee] exercised ordinary diligence and reviewed the Plat referenced in the Installment Contract for Deed which shows the natural gas easement, [Mr. Lee] would have known where he could have constructed the building in question." Moreover, the trial court found that Mr. Lee conceded that Texas Eastern's natural gas easement was properly recorded and shown in the plat that was referenced in the deed and that this constituted notice to him of the easement. Ultimately, the court determined that there was no material misrepresentation or fraud committed by Beach One and that summary judgment as to Mr. Lee's claims against it was proper. Beach One later filed a motion to declare the trial court's prior grant of summary judgment a "final judgment" pursuant to Rule 54.02 of the Tennessee Rules of Civil Procedure. In an order filed December 17, 2020, the trial court entered an order deeming its prior order granting Beach One summary judgment to be final pursuant to Rule 54.02. Thereafter, Mr. Lee filed a notice of appeal. On June 21, 2021, this Court entered a show cause order, noting that the trial court's order omitted the language required under Rule 54.02 and, therefore, was not a final and appealable order. Thereafter, the trial court entered a subsequent order on August 19, 2021, stating that there was "no just reason for delay" and that the order constituted a final judgment as to Mr. Lee's claims against Beach One.


Issue Presented

Mr. Lee raises two issues on appeal for our review, which we have consolidated into a single issue as follows:

Whether the grant of summary judgment was appropriate.

Standard of Review

"The grant or denial of a motion for summary judgment is a matter of law; therefore, our standard of review is de novo with no presumption of correctness." Highlands Physicians, Inc. v. Wellmont Health Sys., 625 S.W.3d 262, 276 (Tenn. Ct. App. 2020) (citing Rye v. Women's Care Ctr. of Memphis, MPLLC, 477 S.W.3d 235, 250...

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