Wildasin v. Mathes

• Decision Date: 31 March 2016
• Docket Number: Civil No. 3:14-cv-2036
• Citation: 176 F.Supp.3d 737
• Court: U.S. District Court — Middle District of Tennessee
• Parties: Joan Ross Wildasin, Plaintiff, v. Peggy Mathes; Hiland, Mathes & Urquhart ; and Bill Colson Auction & Realty Company, Defendants.

176 F.Supp.3d 737

Joan Ross Wildasin, Plaintiff,

v.Peggy Mathes; Hiland, Mathes & Urquhart ; and Bill Colson Auction & Realty Company, Defendants.

Civil No. 3:14-cv-2036

United States District Court, M.D. Tennessee, Nashville Division.

Filed March 31, 2016

Eugene N. Bulso, Jr., Paul J. Krog, Leader, Bulso & Nolan, PLC, Nashville, TN, for Plaintiff.

John D. Kitch, Peter C. Robison, Cornelius & Collins, LLP, Thomas Clifford Corts, Ortale, Kelley, Herbert & Crawford, Aaron S. Guin, Farrar & Bates, Nashville, TN, for Defendants.

MEMORANDUM

KEVIN H. SHARP, UNITED STATES DISTRICT JUDGE

This is a dispute over the auction sale of a house in Pegram, Tennessee. Plaintiff Joan Ross Wildasin sued the administrator C.T.A. (Peggy D. Mathes, or “Mathes”) and the auction company that she hired (Bill Colson Auction & Realty, or “Colson”). Against Mathes, Plaintiff brings claims for negligence as administrator C.T.A. (Count I) and negligence as legal counsel (Count II). Against Colson, she brings claims of negligence and negligence per se (Count III). Both defendants have filed separate Motions for Summary Judgment (Docket Nos. 43, 51.)

For the following reasons, the Court will deny Mathes's Motion on Count I, but grant her Motion on Count II. The Court will deny Colson's Motion on Count III.

BACKGROUND

Except where otherwise indicated, the following facts are undisputed.

I. The Property

Jane Kathryn Ross was the mother of Paul Sorace and Plaintiff. In 1998, Ross executed a will that left most of her estate to Sorace and Plaintiff in equal portions. In 2000, she assigned her power of attorney to Plaintiff. In re Ross, 2014 WL 2999576, at *1 (Tenn.Ct.App. June 30, 2014), perm. app. denied(Tenn. Nov. 21, 2014).

In 1991, Sorace bought a small two-bedroom home on seven acres of land in Pegram, Tennessee, for $57,400. At some point in 2004, Sorace and Ross began discussing the idea of building a larger home on Sorace's land in Pegram so that they could live together. They signed an informal agreement to build the home on July 6, 2005, and construction began shortly after that. Id. The home was finished about a year later. By the time that they moved in, Ross had contributed the vast majority of the construction costs—about $433,000 to Sorace's $16,000. Id.

Ross soon began showing signs of advanced dementia. By July 2008, her health had deteriorated so dramatically that Plaintiff began to consider moving her into a secure assisted-living center. Since Ross had few liquid assets, Plaintiff asked Sorace to sell the home in Pegram. Sorace refused. Id. Acting on Ross's behalf, Plaintiff sued Sorace for unjust enrichment. Id.

Ross died in 2010. Mathes was appointed Administrator C.T.A of her estate. Ross's suit against Sorace continued, with the estate substituted as the plaintiff. The case was eventually transferred to the Seventh Circuit Court for Davidson County (the “probate court”).

On March 14, 2011, Norris & Norris PLC—which represented Mathes at the time— obtained a professional appraisal of the home in Pegram. (See Docket No. 73–1, p. 26.) The appraisal indicated that the home had 3,553 square feet of finished, above-grade interior space. (Docket No., 30-1, pp. 5–8.) The appraisal also placed the home's estimated value at $480,000. (Docket No. 73–1, p. 5.) Norris & Norris emailed a copy of the appraisal to Mathes on December 14, 2011. (Docket No. 73–1, p. 4.)

The probate court ultimately found for Ross's estate and entered a $417,000 judgment against Sorace.¹ In re Ross, 2014 WL 2999576, at *2. When Sorace failed to pay the judgment, the Estate bought the land at a sheriff's auction for $325,000. (Docket No. 73, ex. 2.)

II. Auctioning the Property

After the Estate bought title to the land, Plaintiff moved to sell the land at an auction. (Docket No. 52–1.) The probate court granted the motion and directed Mathes to enter a listing agreement before the sale. (Docket No. 43–2, p. 1.)

Mathes hired Colson to sell the property at an auction. Their agreement set out the terms of the sale: the land would be sold within 90 days and the purchase price would be made in cash, with 15% earnest money due on the day of the sale and the remainder paid on closing. (Docket No. 74–5.) Robert L. “Bobby” Colson was the auctioneer primarily responsible for handling the sale.² (Docket No. 70, p. 4.)

The sale was nothing new for Bobby Colson. He has been a licensed auctioneer and real estate broker for about 35 years and has been certified by the Certified Auctioneers Institute since 1987. He also belongs to the Tennessee Auctioneer Commission, which helps set standards for auctioneers' conduct throughout the state. (Docket No. 53, pp. 1–2.) As he put it in his deposition, he was more than familiar with the “accepted standard of care...for auctioneers in Tennessee.” (Docket No. 53, p. 2.)

Once Bobby Colson knew the address of the property, he began researching the land itself. He turned to an online subscription service called RealTracs.net, which retrieves basic data about land parcels, usually culled and aggregated from public records. (Docket No. 70, p. 5.) He testified that he uses this service for “[e]very sale” to learn the dimensions of property that he sells at auction. (Docket No. 77, p. 57.) On September 8, 2014, Bobby Colson retrieved a property report for the home, stating that the home's total size was “2538 Sq [uare] Feet.” (Docket No. 74, ex. 9, p. 1.)

The home was actually much larger than that. On a property-tax card, the Davidson County Tax Assessor's Office lists the home as having 3,573 square feet of centrally-cooled, centrally-heated space, with 2,538 square feet of “Finished Area.” (Docket No. 75–5.) And the County's Clerk's Deed (Docket No. 20)—which Plaintiff's attorneys had sent to Mathes in 2012—states that the home “consist[s] of approximately 3,553 square feet of living area above grade, and approximately 2,599 square feet of living area below grade.” (Docket No. 74–20, p. 2.)

In his deposition, Bobby Colson testified that he did not directly consult any public records to determine the size of the home. (Docket No. 77, pp. 50–51, 54–55, 56.) He also admitted that he did not understand how the square footage listed on the RealTracs report was calculated, or, at the very least, he “hadn't thought about it.” (Docket No. 77, p. 56.) Still, he relied on the RealTracs report in preparing for the auction sale. And he relied on this figure to advertise for the auction, posting several ads for a “2500 Sq. Ft. Brick Home” in local newspapers and online. (Docket No. 53–4; Docket No. 70, p. 8.)

For her part, Mathes admits that she never saw the advertisements before they were printed; when asked what she typically does to ensure that advertisements contain accurate information about real estate, she concedes that she “do [es]n't do anything.” (Docket No. 74, p. 50.) Mathes also never sent Colson a copy of the 2011 appraisal, nor did Colson ever request it. (Docket No. 77, p. 36.)

III. The Auction Sale

The auction sale was scheduled for 10:30 AM on October 18, 2014. (Docket No. 70, p. 7.) About an hour before the auction began, Bobby Colson opened the home to the public. (Docket No. 70, p. 9.) As potential buyers milled around inside the home, Eugene Bulso, Jr.—Plaintiff's attorney in this action—approached Bobby Colson and introduced himself. (Docket No. 70, p. 9.) Bulso then opened a laptop computer that displayed a copy of the March 2011 appraisal report, pointing out that the report listed the home's size as 3,553 square feet—not, as auction flyers had advertised, 2,500 square feet. (Docket No. 70, p. 9–10.)

The auction had not yet begun. Bobby Colson, apparently thinking there was still time to correct the error, found Mathes and told her that “[a] dude just showed [him] an appraisal that the square footage was 3,500.” (Docket No. 77, p. 36.) He then made an announcement to the assembled bidders:³

I had—yeah. I had advertised 2500 square feet, which I took off the tax record, but the tax record did not include the upstairs. So there's about another 11 or 12 hundred square feet that—that are up—that—that's upstairs there that we took off an appraisal that one of the attorneys had here if anybody'd like to look at it. But there's another about 1200—so you're looking at probably 3500 square feet there, more or less.

(Docket No. 77, p. 46.)

Nobody cancelled the auction after the announcement. (Docket No. 70. p. 12.) Bobby Colson later said that this was not unusual: on “more than one occasion,” he had learned new information about a piece of property on the day that it was being auctioned, sometimes from neighbors or from other auction attendees. (Docket No. 53, p. 5.) He also felt good about the chances of selling Plaintiff's home. He noticed that there was “a good-sized crowd” gathered at the home that morning, including two people who had bought land at other auctions that Bobby Colson had worked. (Docket No. 53, p. 6.)

The auction began about five minutes after the announcement. (Docket No. 70, p. 14.) After taking bids for about fifteen minutes, Bobby Colson mentioned that the home had been appraised for $480,000 a few years earlier. (Docket No. 70, p. 14.) He also told the crowd that property taxes had assessed the home's value at over $400,000. (Docket No. 70, p. 14.) The bidding continued for a few more minutes. Then, after about half an hour of bidding, Bobby Colson dropped the gavel for the highest bidder. The final sale price was $315,000. (Docket No. 70, pp. 14–15.)

IV. Approving the Sale Price

Mathes filed a Motion to Approve the auction contract the next week. (Docket No. 52–5, p. 1–3.) On November 7, 2014, the parties appeared at a hearing before Judge David R. Kennedy. Both sides told Judge Kennedy that there was no dispute on the basic question of approving the contract. Mathes stated that Bulso had agreed not to “object to the contract being approved.” (Docket No. 73–7, p. 3.) And Bulso also told Judge Kennedy that approving the contract was ...