Patel v. Bayliff

• Decision Date: 12 March 2003
• Docket Number: No. W2002-00238-COA-R3-CV.,W2002-00238-COA-R3-CV.
• Citation: 121 S.W.3d 347
• Parties: Pravin PATEL, et ux. v. Douglas A. BAYLIFF, et al.
• Court: Tennessee Court of Appeals

121 S.W.3d 347

Pravin PATEL, et ux. v. Douglas A. BAYLIFF, et al.

No. W2002-00238-COA-R3-CV.

Court of Appeals of Tennessee, at Jackson.

January 21, 2003 Session.

March 12, 2003.

Application for Permission to Appeal Denied by Supreme Court October 6, 2003.

Tim Edwards and R. Douglas Hanson, Memphis, Tennessee, for the appellants, Pravin and Mita Patel.

Arnold Goldin, Memphis, Tennessee, for the appellees, Douglas A. Bayliff and Tommie W. Bayliff.

Evan Nahmias, Memphis, Tennessee, for the appellee, Germantown Pest Control Company.

OPINION

DAVID R. FARMER, J., delivered the opinion of the court, in which ALAN E. HIGHERS, J. and HOLLY K. LILLARD, J., joined.

This is an appeal from a grant of summary judgment. The underlying case concerned the sale of a home to the Appellants that, subsequent to the closing, evidenced termite damage. Appellant buyers claim that the Appellee sellers are responsible for this damage under various theories of recovery, all of which were dismissed by the trial court. Appellants further assert that the Appellee termite company is responsible for the damages because they failed to disclose on the termite inspection report that the home had been repeatedly treated for termites by that same company. We affirm in part, reverse in part, and remand.

Appellants, Dr. and Mrs. Patel (the Patels), purchased a home from the Appellees, Douglas and Tommie Bayliff (the Bayliffs). The closing on the property occurred on June 2, 1998. It is important to note that, instead of the closing taking place in one location, the Patels signed the necessary documents at their home in Bolivar, TN while the Bayliffs completed their closing documents in Memphis. The Patel's closing attorney received the Bayliffs' documents at his office in Jackson, TN the following day. After reviewing the documents, the Patels' attorney approved the release of the funds to complete the purchase of the home.

Prior to the closing the Patels visited and inspected the residence on numerous occasions. The Patels also hired a home inspector and a stucco inspector to examine the property prior to closing. The dispute, however, centers around the Wood Destroying Insect Infestation Inspection Report (the termite letter) prepared in preparation for the closing on the home.

Appellee Germantown Termite and Pest Control (GTPC) conducted the termite inspection required by the contract for sale of the property entered into by the parties and produced the required termite letter. Section II of the termite letter contains a box next to the statement "[n]o [v]isible evidence of a wood destroying insect infestation was observed." This box was checked by the inspector. The termite letter also has a box which may be checked corresponding to the statement that "[i]t appears that the structure(s) or a portion thereof may have been previously treated. Evidence of previous treatment: __________." This box was not checked by the inspector. The Patels contend that, since GTPC was under contract with the Bayliffs and had treated previous termite problems at the home, GTPC had a duty to check this box, thereby alerting the Patels of these prior treatments.¹ GTPC maintains that they had no such duty unless such information was specifically requested by the Appellants.

Appellee Bayliff (seller) was required to sign the termite letter in Section VIII. This section, entitled "Statement of Buyer & Seller," contains the following language immediately preceding the Appellee's signature.

This report is integral to, and a necessary part of the inspecting company's full disclosure as to the scope and inherent limitations of the inspection and report of findings. It is most important that the interested parties acknowledge this advice. The Seller hereto agrees that all known property history information regarding WDI infestation, damage from infestation, and treatment history has been disclosed to the Buyer. (Emphasis in original.)

As noted, Mr. Bayliff signed the termite letter in the space provided below this statement. The Patels did not receive the termite letter until the day after signing the documents for the closing. The closing attorney testified that "I would not have disbursed funds without [Dr. Patel] knowing everything that was on the termite letter." It appears that the funds were not released for the closing until after the termite letter was received.

The Patels began experiencing "leak issues" approximately one (1) month after moving into the residence. Further damage was noted in the Fall of 1998. An individual from Keystone Builders came to the residence and identified the problem as termites. The Patels contacted GTPC who sent an individual to inspect the damage and make needed repairs. GTPC subsequently treated the residence. Despite the treatment, the Patels continued to experience numerous termite related problems between January and April 1999. The Patels claim that the repairs made by GTPC were substandard and offered the testimony of a representative of AAA Restoration Services, Inc. that the cost to repair the damage is estimated at $40K to $50K.

The Patels filed suit against the Bayliffs, GTPC, and other parties who were later dismissed. In the initial complaint the plaintiffs alleged that the Bayliffs were guilty of "fraudulent misrepresentation/concealment," and "negligent misrepresentation." The claims against GTPC were for negligent misrepresentation, breach of contract and violation of the Tennessee Consumer Protection Act. The plaintiffs subsequently amended their complaint to further allege violation of the Tennessee Residential Property Disclosures Act² (TRPDA) by the Bayliffs, and the Restatement of Torts (Second) § 552³ by the Bayliffs and GTPC.

Based on these allegations, the plaintiffs asked that the contract for sale of the residence be rescinded, and also that they be awarded monetary damages. The TRPDA claim was dismissed upon motion of the Bayliffs that it had not been filed within the one year statute of limitations. The Bayliffs then moved for summary judgment as to all remaining claims, and the motion was granted "as to tort actions based upon deceit or misrepresentation, intentional or negligent." Summary judgment was denied, however, "on the action for rescission." As the "action for rescission" to which the court referred was tied to the claims of "fraudulent misrepresentation/concealment," these claims remained to be addressed.

GTPC also filed a motion for summary judgment, which was initially denied. Upon a motion to reconsider, however, the trial court granted summary judgment to GTPC "on the theory of misrepresentation." This order was subsequently modified, making the order a final, appealable order.

The Patels and the Bayliffs also filed motions for reconsideration with the trial court. The court addressed these motions and the outstanding claims of fraudulent misrepresentation and/or concealment in an order dated January 2, 2002, wherein the court denied the plaintiffs' motion for reconsideration and granted that of the defendant Bayliff on the rescission issue. Having disposed of all the issues pertaining to the Bayliffs, the court "ma[de] an express determination in this cause that there is no just reason for delay and hereby expressly directs entry of Final Judgment in favor of [the Bayliffs] on their motion for summary judgment, and this cause be and the same is hereby dismissed as to [the Bayliffs] in its entirety." This appeal followed.

Issues

The Appellant raises two issues on appeal:

(1) Whether the trial court erred in granting summary judgment to the defendant, Bayliffs; and

(2) Whether the trial court erred in granting summary judgment as to the defendant, Germantown Termite and Pest Control.

Standard of

As indicated, this is an appeal from a grant of summary judgment. The standard for review of a motion for summary judgment is set forth in Staples v. CBL & Assocs., 15 S.W.3d 83 (Tenn.2000):

The standards governing an appellate court's review of a motion for summary judgment are well settled. Since our inquiry involves purely a question of law, no presumption of correctness attaches to the lower court's judgment, and our task is confined to reviewing the record to determine whether the requirements of Tenn. R. Civ. P. 56 have been met. See Hunter v. Brown, 955 S.W.2d 49, 50-51 (Tenn.1997); Cowden v. Sovran Bank/Central South, 816 S.W.2d 741, 744 (Tenn.1991). Tennessee Rule of Civil Procedure 56.04 provides that summary judgment is appropriate where: (1) there is no genuine issue with regard to the material facts relevant to the claim or defense contained in the motion, see Byrd v. Hall, 847 S.W.2d 208, 210 (Tenn.1993); and (2) the moving party is entitled to a judgment as a matter of law on the undisputed facts. See Anderson v. Standard Register Co., 857 S.W.2d 555, 559 (Tenn.1993). The moving party has the burden of proving that its motion satisfies these requirements. See Downen v. Allstate Ins. Co., 811 S.W.2d 523, 524 (Tenn.1991). When the party seeking summary judgment makes a properly supported motion, the burden shifts to the nonmoving party to set forth specific facts establishing the existence of disputed, material facts which must be resolved by the trier of fact. See Byrd [ ], 847 S.W.2d at 215.

To properly support its motion, the moving party must either affirmatively negate an essential element of the nonmoving party's claim or exclusively establish an affirmative defense. See McCarley v. West Quality Food Serv., 960 S.W.2d 585, 588 (Tenn.1998); Robinson v. Omer, 952 S.W.2d 423, 426 (Tenn.1997). If the moving party fails to negate a claimed basis for the suit, the [nonmoving] party's burden to produce evidence establishing the existence of a genuine issue for trial is not triggered and the motion for summary judgment must fail. See McCarley [ ], 960 S.W.2d at 588; Robinson [ ], 952 S.W.2d at 426. If the moving party successfully negates a claimed basis for the...