Frank Collier Auction & Realty Co. v. Rice ( 1997 )

FRANK COLLIER AUCTION & )
REALTY COMPANY, )
)
Plaintiff/Appellee, ) Appeal No.
) 01-A-01-9608-CH-00384
v. )
) Davidson Chancery
JOE M. RICE and ) No. 91-3839-I
WAYNE B. GLASGOW, JR., )
)
v.
Defendants, )
)
)
FILED
) February 21, 1997
JOE E. HOLLAND d/b/a )
HOLLAND LAND SURVEYING, ) Cecil W. Crowson
) Appellate Court Clerk
Defendants/Appellants. )
COURT OF APPEALS OF TENNESSEE
MIDDLE SECTION AT NASHVILLE
APPEAL FROM THE CHANCERY COURT FOR DAVIDSON COUNTY
AT NASHVILLE, TENNESSEE
THE HONORABLE IRVIN H. KILCREASE, JR., CHANCELLOR
JOHN L. WHITFIELD, JR.
Cavalier Building
95 White Bridge Road, Suite 509
Nashville, Tennessee 37205
ATTORNEY FOR PLAINTIFF/APPELLEE
PHILLIPS M. SMALLING
P. O. Box 340
Byrdstown, Tennessee 38549
ATTORNEY FOR DEFENDANT/APPELLANT
AFFIRMED AND REMANDED
SAMUEL L. LEWIS, JUDGE
MEMORANDUM OPINION1
This is an appeal by defendant/appellant, Joe M. Rice, from the decision of
the trial court awarding Rice $5,600.00 tendered by interpleader and dismissing his
claims against plaintiff/appellee, Frank Collier Auction & Realty Company
("Collier"), and defendant, Wayne B. Glasgow. The facts out of which this matter
arose are as follows.
On 12 October 1991, Collier offered land located on the Cumberland River
for sale at an auction. The owner of the land was Wayne B. Glasgow. Collier
provided prospective buyers with a survey plat, an appraisal, a newspaper ad
regarding the view of the river from the property, and a letter dated 1 October 1991
from Brenda Apple, an employee of the State Division of superfund, regarding the
environmental clean-up of the land and liability for the clean-up. Joe M. Rice was
the highest bidder at the auction. At the close of the auction, Rice, Glasgow, and
Collier executed a contract for the sale of the property. The contract provided as
follows:
Miscellaneous condition buyer is aware of E.P.A. clean up taking
place on property being sold and has been given the letter from
Brenda Apple dated 10-1-91 pertaining to such.
....
Title: Seller agrees to furnish Buyer a title insurance policy as of
the date of closing. The policy is to be in the usual form, subject
only to the usual printed exceptions and those agreed in this
contract.
....
Disclaimer: Seller and Purchaser acknowledge that they have not
relied upon the advice or representations, if any . . . relative to the
legal and tax consequences of this contract in the sale of the
premises, the purchase and ownership of the premises, . . . zoning
ordinances or the investment or resale value of the premises.
Seller and Purchaser both acknowledging that if such matters
have been of concern to them, they have sought and obtained
independent advice relative thereto.
(underlined portion hand-written)
1
Court of Appeals Rule 10(b):
The Court, with the concurrence of all judges participating in the case, may affirm , reverse or m odify
the actions of the trial court by mem orandum opinion when a formal o pinion would have no
precedential value. When a case is decided by memorandum opinion, it shall be designated
"MEMORANDUM OPINIO N," shall not be published, and shall not be cited or relied on for any
reaso n in a sub sequent unre lated case.
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Three issues arose before the proposed closing date. The first involved the
environmental clean-up and the interpretation of the letter written by Brenda Apple.
Rice contended that the letter represented the State would have no interest in the
property after sixty days. The second issue involved the existence of a one-hundred
feet wide railroad easement on the south side of the property that adjoined the river.
In a letter dated 28 October 1991, Glasgow stated that the easement was "more than
the 15 foot right-of-way easement represented to Mr. Rice." Rice claimed that the
plat did not reveal the railroad easement; however, the trial court found that "[t]he
railroad is shown on the plat." The third issue involved the title insurance policy. In
an attempt to comply with the contract, Glasgow delivered a proposed insurance
policy, but the policy included an exception for the easement. Rice contended that
the policy did not comply with the contract for sale. Despite discussions between the
parties, they did not resolve the issues and the closing never occurred.
On 25 November 1991, Collier filed an interpleader action naming Glasgow
and Rice as defendants. The complaint sought an adjudication of who was entitled
to the $5,600.00 in earnest money paid by Rice on the date of sale. Rice filed an
answer, a counter-claim against Collier, and a cross-claim against Glasgow. The
counter and cross claims alleged intentional and fraudulent misrepresentation and
violations of the Tennessee Consumer Protection Act. The parties agreed that Rice
was entitled to the earnest money, and the court entered an order to that effect on 12
May 1993. On 21 May 1993, Glasgow filed a third-party complaint against Joe E.
Holland d/b/a Holland Land Surveying ("Holland"). Glasgow alleged that Holland
was liable for any damages assessed against Glasgow because of inaccuracies in the
survey plat. The record does not reflect any further action on this claim or that
Glasgow ever effected service of process.
The matters raised in Rice's claims were tried before the court without a jury
on 8 December 1994. The court entered a default judgment against Glasgow, but
reserved ruling on damages. In a memorandum opinion, the court held as follows:
Rice agreed in the Contract for the Sale of Real Estate, that he
read and signed, that the contract contained the entire agreement
between the parties and that there were no oral or collateral
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conditions, agreements or representations involved in the
transaction.
Whatever representations that may have been made to Rice by
French and/or Glascow [sic] were not relied on by Rice. Rice
made an independent investigation of his concerns about the state
of the property and based on the investigation decided to refuse
to close the transaction, and he was refunded his down payment.
Specifically, Rice objected to the railroad easement being made
a printed exception in the title policy even though "easements"
were printed exceptions in the title policy.
Further, Rice's contention that fraudulent misrepresentations
were made to him with respect to the Superfund clean-up lien is
without merit, in view of the provisions in the contract concerning
this matter and the information furnished to him at the bid calling.
....
Finally, the Court finds that [Rice] failed to carry his burden
of proof on the issue of fraudulent misrepresentation with respect
to the state of the property.
....
Likewise, the Court further finds that Rice failed to carry his
claim that Glascow [sic] violated the Consumer Protection Act,
Tenn. Code Ann. § 47-18-104.
The court entered an order on 25 April 1995 incorporating its holdings in the
memorandum opinion. Rice filed a timely "motion for new trial or alteration and
amendment of judgment." The court denied the motion on 1 April 1996.
Thereafter, Rice filed a notice of appeal. It is Rice's contention that the trial
court made the following three errors: 1) it failed to find that Glasgow failed to
deliver an appropriate title insurance policy and that Rice was entitled to
compensatory damages; 2) it found that Rice failed to satisfy his burden of proof as
to the fraudulent misrepresentation claim; and 3) it found that Rice failed to satisfy
his burden of proof as to the Consumer Protection Act claim.
Rice's first issue is: “Whether the trial court erred in not finding that Joe
Rice as Counter-Plaintiff and Cross-Plaintiff was entitled to recover compensatory
damages for the failure of Wayne B. Glasgow to deliver a title insurance policy
without a title exception defect.” In his brief and motion for a new trial, Rice argued
that the basis for his claim was that Glasgow breached the contract when he failed to
provide an appropriate title insurance policy. Rice argued:
Thus, the seller Wayne Glasgow breached his obligation to
deliver clear title. Joe Rice was entitled to his earnest money as
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well as compensatory damages. Glasgow was on notice of his
liability. The contract also stated:
Breach of contract by seller: . . . In the event of seller
default the deposited money herewith deposited by the
buyer shall be returned to the buyer by agent. The buyer
may sue for specific performance of this agreement or for
damages, or both . . . .
Joe Rice exercised his right to seek damages. He testified that the
property was worth ONE HUNDRED THOUSAND
($100,000.00) DOLLARS if as represented on the day of sale. .
. . Joe Rice is entitled to the benefit of his bargain and the trial
court erred in not awarding him a judgment for SEVENTY TWO
THOUSAND ($72,000.00) DOLLARS . . . .
The problem with this argument is that Rice's amended complaint did not include a
breach of contract action and the ad damnum clause did not include a request for
$72,000.00 in compensatory damages. A court does not have to create a claim where
none exists. Rampy v. ICI Acrylics, Inc., 898 S.W.2d 196, 198 (Tenn. App. 1994);
Brown v. City of Manchester, 722 S.W.2d 394, 397 (Tenn. App. 1986). The
allegations of the complaint must provide the adverse party with sufficient notice of
the allegations he or she is called upon to answer. Jasper Engine & Transmission
Exch. v. Mills, 911 S.W.2d 719, 720 (Tenn. App. 1995). It is the opinion of this
court that the amended complaint failed to provide Rice and Glasgow with sufficient
notice of a breach of contract claim. Rice can not recover for breach of contract when
he did not allege such in his amended complaint. Thus, the trial court did not err in
failing to award Rice $72,000.00 in compensatory damages.
As to the remaining issues, this court is of the opinion that the evidence
preponderates in favor of the trial court's findings. This record fully supports the
findings of the trial court that there was no evidence of any misrepresentation or of
any violations of the Consumer Protection Act.
Therefore, pursuant to Rule 10 of the Rules of the Court of Appeals, we
affirm the judgment of the trial court in all respects. Costs on appeal are assessed
against defendant/appellant, Joe M. Rice, and the cause is remanded to the trial court
for any further necessary proceedings.
__________________________________
SAMUEL L. LEWIS, JUDGE
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CONCUR:
_________________________________
HENRY F. TODD, P.J., M.S.
_________________________________
WILLIAM C. KOCH, JR., J.
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