Harold Oliver v. Todd Pulse ( 2020 )

04/14/2020
IN THE COURT OF APPEALS OF TENNESSEE
AT JACKSON
November 14, 2019 Session
HAROLD OLIVER ET AL. v. TODD PULSE ET AL.
Appeal from the Chancery Court for Hardeman County
No. 16745 Martha B. Brasfield, Chancellor
___________________________________
No. W2019-00750-COA-R3-CV
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This appeal requires us to determine the scope of a real estate licensee’s duty under the
Tennessee Residential Property Disclosures Act codified at Tennessee Code Annotated §
§ 66-5-201 et seq. to advise their client to disclose conditions of improved real property.
We hold that a licensee’s duty under the Act encompasses a duty to advise his or her
client/seller to disclose known material defects. We affirm denial of Plaintiff/Sellers’
motion for summary judgment on the issue of breach of statutory and contractual duties.
In light of the undisputed facts of this case, we find Defendants are entitled to a judgment
as a matter of law on the question of breach and remand for entry of a judgment
consistent with this Opinion.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed
and Remanded.
CARMA DENNIS MCGEE, J., delivered the opinion of the court, in which J. STEVEN
STAFFORD, P.J., W.S., and KENNY W. ARMSTRONG, J., joined.
Julie C. Bartholomew, Somerville, Tennessee, for the appellants, Harold Oliver, and
Patsy Oliver.
Russell E. Reviere and Jonathan D. Stewart, Jackson, Tennessee, for the appellees, Todd
Pulse and Hardeman County Results Realty, Inc.
OPINION
Background and Procedural History
The gravamen of this action is whether a real estate licensee has a duty to advise
his or her client/seller to disclose to a buyer of improved real property known material
defects other than those specifically listed on the Disclosure Statement prescribed by
Tennessee Code Annotated section 66-5-202 and contained in sample form at Tennessee
Code Annotated section 66-5-210. The background facts giving rise to this lawsuit are
largely undisputed and were set forth in Odom v. Oliver, 310 S.W.3d 344 (Tenn. Ct. App.
2009), perm. app. denied (Tenn. Nov. 23, 2009), the 2006 action that precipitated the
current action. The current action is essentially an action for indemnity by the
defendant/sellers against the defendant/real estate agent/licensee in Odom.
In 1999, Harold Oliver and Patsy Oliver (collectively, “Sellers”) purchased the
home that is at the center of both lawsuits. Odom, 310 S.W.3d at 346. The home was of
log construction, but was covered by vinyl siding on the exterior when Sellers purchased
it. Sellers made improvements to the home, including finishing the interior with sheet
rock. As a result, “the house no longer looked like a log home.” Id. When Sellers
decided to sell the home in 2005, they listed it with Todd Pulse (“Mr. Pulse”), a licensed
real estate agent with Hardeman County Results Realty, Inc. (“Results Realty”). Id. As
we stated in Odom,
Sellers originally informed Mr. Pulse that they had made improvements to
the house, and, eventually, [S]ellers explained that the house was actually a
log construction home covered on the outside with vinyl siding and they
had installed sheet rock within the house. Sellers also completed and signed
a Tennessee Residential Property Condition Disclosure (“Disclosure”). The
Disclosure indicated that new wiring was installed five years ago, but there
is no specific indication that Sellers installed sheet rock inside the house.
The Disclosure Act also contains a buyer’s acknowledgment that the
“disclosure statement is not intended as [a] substitute for any inspection ...
[and that buyers] have a responsibility to pay diligent attention to and
inquire about those material defects which are evidenced by careful
observation.”
Buyers eventually purchased the house from Sellers. The purchase
agreement provided that Buyers maintained a right to inspect the house for,
among other things, structural defects and interior water intrusions. The
purchase agreement also waives any warranty and provided the following:
Buyer shall, within ___ days after Binding Agreement Date, make such
inspections described herein AND, by written notice to Seller, either:
(1) accept the Property in its present “AS IS” condition with
any and all faults and no warranties expressed or implied.
Seller has no obligation to make repairs;
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OR (2) furnish Seller a copy of the inspection report and a
written list of items set forth in the inspection report which
Buyer requires to be repaired and/or replaced in a
professional and workmanlike manner.
OR (3) furnish Seller with a list of written specified
objections and immediately terminate this Agreement with all
Earnest Money refunded to Buyer. Seller, upon request, shall
be entitled to a copy of all inspection reports.
Nevertheless, Buyers did not have the house inspected before completing
the sale.
Although Mr. Pulse contends that in a telephone conversation to Buyers’
realtor he mentioned that the house was a log home, Buyers’ realtor denied
receiving this information. Buyers discovered that the house was
constructed from logs in July 2006, when a strong wind storm tore some of
the vinyl siding off of the house. Plaintiffs subsequently retained a
residential home builder, Charles Hill (“Mr. Hill”) to inspect the house. Mr.
Hill discovered that up to sixty percent of the logs were damaged or rotting.
Mr. Hill explained that this compromised the structural integrity of the
home and believed it would cost $125,000.00 to repair. Buyers admit that
neither Sellers nor Mr. Pulse were aware of any rot or moisture problem
with the wooden logs before Buyers purchased the house.
Id. at 346-48.
In their 2006 action against Sellers, Mr. Pulse, and Results Realty, Buyers sought
rescission of the 2005 purchase agreement to buy the real property and alleged fraudulent
concealment and violation of the Tennessee Residential Property Disclosures Act. Id. at
348. The trial court awarded summary judgment to all defendants in the 2006 action. Id.
On appeal, this Court affirmed summary judgment in favor of Mr. Pulse and
Results Realty for the alleged violation of their statutory duties to Buyer. The Odom
court held that, under Tennessee Code Annotated section 66-5-206 (2004), Mr. Pulse’s
duty to Buyers was limited to disclosing “adverse facts,” defined by the statute as
“conditions or occurrences generally recognized by competent licensees that significantly
reduce the structural integrity of improvements to real property, or present a significant
health risk to occupants of the property.” The Odom court agreed with the trial court that
Buyers had “failed to demonstrate that competent realtors generally recognized that a
house constructed from logs significantly reduced the structural integrity of the house.”
Id. at 352-53.
However, the Odom court reversed summary judgment in favor of Sellers with
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respect to Buyers’ action for fraudulent concealment. Id. at 353. With respect to whether
“Sellers had a duty to disclose that the house was constructed from logs because that
information [was] a material fact or condition[,]” the Odom court “limit[ed] [its] inquiry
as to whether a reasonable person would attach importance to the fact that the house was
a log home in determining his or her choice in the transaction in question.” Id. at 351.
The Odom court held, “[t]he question [of] whether the log construction [was] a material
fact and the question [of] whether the log construction could have been discovered in the
exercise of ordinary diligence [were] two inquiries that raise[d] a genuine issue of
material fact [with respect to] whether Sellers had a duty to disclose.” Id. at 352. The
Odom court further determined that Sellers were not entitled to summary judgment on the
issue of causation where testimony in the case raised a genuine issue of material fact with
respect to whether “log homes are more susceptible to fungal spores which cause rotting
and require a greater amount of care and maintenance than a conventional home.” Id.
Buyers eventually voluntarily nonsuited their action against Sellers in April 2013, leaving
those issues unresolved.
Meanwhile, in June 2009 Sellers filed this separate action against Mr. Pulse and
Results Realty (collectively, “Defendants”) in the Chancery Court for Hardeman County.
In their complaint, Sellers asserted claims for breach of fiduciary duty, breach of contract,
negligence, indemnity, contribution, and violation of the Tennessee Consumer Protection
Act. The underlying allegations supporting Sellers’ claims were that Mr. Pulse breached
his statutory duty to Sellers by failing to advise them to disclose the log construction of
the home, thereby causing Sellers to incur substantial costs to defend the 2006 lawsuit.
Defendants answered in July 2009, denying allegations of negligence or wrong-
doing and asserting that Mr. Pulse had advised Buyers’ real estate agent that the home
was of log construction. Defendants further denied any “duty or obligation beyond that
set forth in T.C.A. § § 66-5-201, et seq.” Defendants additionally asserted that Sellers’
action was barred by the doctrines of res judicata and collateral estoppel. Several
competing motions for summary judgment ensued.
Defendants filed their first motion for summary judgment in April 2010.
Defendants asserted that Sellers’ claim under the Tennessee Consumer Protection Act
was barred by the one-year statute of limitations set forth at Tennessee Code Annotated
section 47-18-101, et seq., and that the matter was barred by the doctrines of res judicata
and collateral estoppel.
Sellers filed their response in opposition to Defendants’ motion in June 2010. In
August 2010, the trial court dismissed Sellers’ claim under the Tennessee Consumer
Protection Act as time-barred and denied Defendants’ motion for summary judgment on
the theories of res judicata and collateral estoppel.
Sellers filed their first motion for summary judgment in July 2013. In their
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motion, Sellers asserted that they were entitled to implied indemnity based on
Defendants’ breach of fiduciary duty and because any negligence on their part was
“passive” compared to the “active” negligence of Mr. Pulse.
Defendants responded to Sellers’ motion in August 2013. In their response,
Defendants asserted that Mr. Pulse’s duty was limited to disclosing “adverse facts,” that
he complied with all duties enumerated the statutes, that section 62-13-402 abrogated any
common law fiduciary duties, and that indemnity was not appropriate under the
circumstances of this case. Defendants additionally asserted that, under Odom, section
66-5-206 provided the exclusive remedy in an action against a real estate licensee.
The trial court denied Sellers’ motion for summary judgment by order entered in
April 2014, and incorporated its August 28, 2013 ruling by reference. The trial court
determined that the question of duty had not been resolved and that, assuming a duty, a
genuine issue of material fact existed with respect to whether Mr. Pulse informed the
Buyers’ agent of the log construction.
In August 2016, Sellers filed Buyers’ depositions and renewed their motion for
summary judgment on their claim for indemnity. Sellers also filed the expert affidavit of
Nick French (“Mr. French”), a licensed Tennessee real estate broker, in support of their
argument that Mr. Pulse had a duty to advise Sellers to disclose the log construction and
that Mr. Pulse breached that duty by failing to do so. Sellers further asserted that Mr.
Pulse made no written disclosure to Buyers, and that Buyers’ action against Sellers was
premised “solely upon the non-disclosure of the home’s log construction.”
In their January 2017 response, Defendants again asserted the doctrine of
collateral estoppel and objected to Mr. French’s testimony as “expert testimony.”
Defendants again asserted that Mr. Pulse had no duty to advise Sellers to disclose the log
construction because it was not specifically required by the disclosure form set forth in
section 66-5-210. Defendants repeated their assertion that Mr. Pulse orally informed
Buyers’ agent of the log construction. They also asserted that Mr. French provided no
testimony with respect “to whether that action meets the standard of care where the
disclosure form does not otherwise require such information to be included.” Defendants
additionally repeated their assertion that the statutes supersede any common law cause of
action. Defendants also noted that Mr. French did not state that log construction
constitutes an adverse fact or material defect.
Following a hearing in February 2017, the trial court denied Sellers’ renewed
motion for summary judgment by order entered in April 2017. In its order, the trial court
found that Mr. French’s affidavit did not contain sufficient detail regarding how he
reached his conclusion that Mr. Pulse’s conduct fell below the standard of care. The trial
court found that, notwithstanding the absence of countervailing testimony, more detailed
facts were required to demonstrate how Mr. Pulse’s conduct violated the standard of care
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set forth in the statutes.
Defendants renewed their motion for summary judgment in July 2018. In their
motion, Defendants asserted that they were under no duty to instruct Sellers to disclose
information related to the log construction on the residential property disclosure form.
Defendants asserted that the parties agreed that log construction, by itself, is not a
“defect[,]” and relied on [s]ection 66-5-202(1) in support of the proposition that the
statutes require disclosure of “any material defects known to the owner.” Defendants
also asserted that whether Mr. Pulse was aware of any “adverse fact” was determined by
this Court in Odom v. Oliver.
Sellers responded to Defendants’ motion on July 27, 2018, and reiterated their
assertion that Mr. Pulse failed to inform them of their rights and obligations under the
statutes where he failed to advise them to disclose of the log construction. Sellers did not
dispute Defendants’ statement that “[l]og construction is not a condition which, on its
own, reduces the structural integrity of a house.” Sellers also did not dispute that the
disclosure form provided by the statutes does not contain a specific question with respect
to the type of construction, but disputed that disclosure of the log construction was not
required. Sellers disputed Defendants’ assertion that Mr. French’s affidavit did not
qualify as an expert affidavit and contended that Defendants had failed to identify any
expert proof that they complied with the standard of care.
Sellers again renewed their motion for summary judgment in August 2018, and
Defendants filed their response in opposition to summary judgment in October 2018. In
their renewed motion, Sellers asserted that no disputed issues of material fact existed with
respect to Defendants’ fault and liability, with respect to Sellers’ comparatively less fault,
or with respect to Defendants’ “liability to indemnify” Sellers. Sellers moved the court to
award them a judgment to recover their attorneys’ fees and litigation costs based on
implied indemnity. Sellers proffered Mr. French’s revised affidavit in support of their
contention that Mr. Pulse had a duty to advise Sellers to disclose the log construction but
failed to do so. In their response, Defendants asserted that Mr. French’s opinion with
respect to the standard of care for realtors should be disregarded because the standard is
set forth in the statutes as a matter of law. Defendants further asserted that a genuine
issue of material facts existed with respect to breach of duty where Mr. Pulse testified
that he complied with the statutory requirements. Defendants submitted that the issue
was decided in Odom when this Court held that “Defendants did not have a duty to
instruct disclosure of log construction because in and of itself it did not constitute an
‘adverse fact[]’ or ‘defect.’” Defendants re-asserted their position that Mr. Pulse
complied with section 66-5-201 et seq. where “the clear language of the disclosure
statutes does not mandate that construction type be disclosed on the form.”
The trial court heard the parties’ renewed motions in February 2019 and held that
“while a seller is required by law to disclose material facts, … an agent’s duty to his
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client/seller under Tennessee Code Annotated § 66-5-206 extends only to advising the
client/seller’s disclosure of those property conditions specifically listed on the statutory
disclosure [f]orm[.]” The trial court accordingly found that Mr. Pulse had complied with
the statute and was therefore immunized from liability to any party. The trial court
additionally determined that a genuine issue of material fact existed with respect to
whether Mr. Pulse had orally informed Buyers’ agent of the log construction. The trial
court granted Defendant’s renewed motion for summary judgment and denied Seller’s
renewed motion by order entered on April 3, 2019. This appeal ensued.
Issues Presented
Sellers raise the following issues for our review:
I: Did the Trial Court err in construing T.C.A. § 66-5-206 to preclude
Licensee and Broker’s legal liability to Sellers, thereby erroneously
granting summary judgment to Licensee and Broker?
II: Did the Trial Court err in failing to award Sellers summary judgment,
such that the matter should be remanded to the Trial Court for entry of
summary judgment against Licensee and Broker, jointly and severally, and
for the determination of the amount of Sellers’ damages, including
attorneys fees incurred by Sellers in this appeal?
The issues presented by this matter, as we perceive them, are:
I. Whether the trial court erred by determining that, under Tennessee Code
Annotated sections 66-5-201 et. seq., a real estate agent’s duty to advise
sellers to disclose conditions of improved real property is limited to those
conditions specifically set-forth on the disclosure form required by section
66-2-201 and provided in sample form by section 66-5-210.
II. Whether the trial court erred by finding that a genuine issue of material
fact existed with respect to whether Mr. Pulse breached his statutory duty to
Sellers.
Standard of Review
The question of whether a defendant owes a duty to a plaintiff is a question of law
to be determined by the courts. Cullum v. McCool, 432 S.W.3d 829, 832 (Tenn. 2013).
We review questions of law de novo upon the record, with no presumption of correctness.
Armbrister v. Armbrister, 414 S.W.3d 685, 692 (Tenn. 2013). Similarly, questions of
statutory construction present questions of law which we review de novo, with no
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presumption of correctness. Sneed v City of Red Bank, 459 S.W.3d 17, 22 (Tenn. 2014).
It is well-settled that, when construing a statute,
[o]ur primary objective ... is to carry out the intent of the legislature without
unduly broadening or restricting the statute. When a statute is clear, we
apply the plain meaning without complicating the task, and simply enforce
the written language. When a statute is ambiguous, however, we may refer
to the broader statutory scheme, the history of the legislation, or other
sources to discern its meaning.
Mansell v. Bridgestone Firestone N. Am. Tire, LLC, 417 S.W.3d 393, 400 (Tenn. 2013)
(citations omitted).
Our review of the trial court’s disposition of a motion for summary judgment also
is de novo upon the record with no presumption of correctness. Kershaw v. Levy, 583
S.W.3d 544, 547 (Tenn. 2019) (citation omitted). 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.” Tenn. R. Civ. P.
56.04. If the party moving for summary judgment
does not bear the burden of proof at trial, the moving party may
satisfy 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 in original). The party opposing a properly supported motion for summary
judgment “‘may not rest upon the mere allegations or denials of [its] pleading,’ but must
respond, and by affidavits or one of the other means provided in Tennessee Rule 56, ‘set
forth specific facts’ at the summary judgment stage ‘showing that there is a genuine issue
for trial.’” Id. at 265 (emphasis in original) (quoting Tenn. R. Civ. P. 56.06). “The
nonmoving party ‘must do more than simply show that there is some metaphysical doubt
as to the material facts.’” Id. (quoting Matsushita Elec. Indus. Co., 475 U.S. at 586, 106
S. Ct. 1348 (1986)). Rather, “[t]he nonmoving party must demonstrate the existence of
specific facts in the record which could lead a rational trier of fact to find in favor of the
nonmoving party.” Id.
Real Estate Licensee’s Duty to Seller
We begin our discussion by noting that Mr. Pulse’s obligation to Buyers with
respect to disclosure of conditions in this case is not before us. That issue was addressed
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in Odom v. Oliver, where we held that Mr. Pulse’s obligation to Buyers was to disclose
“adverse facts.” In Odom, we held that the record in that case did not demonstrate that
the log construction itself, without evidence of known deterioration or defect, constituted
an adverse fact. Odom, 310 S.W.3d at 353. Odom did not address Mr. Pulse’s duty to
advise Sellers, nor did it determine whether Sellers had a duty to disclose the log
construction. See id. at 352. Rather, the Odom court held that, with respect to Buyers’
claim for fraudulent concealment, a genuine issue of material fact existed in that case
with respect to whether the log construction was a material fact that Sellers had a duty to
disclose. Id. However, the issue of Mr. Pulse’s statutory duty to advise Sellers was not
before the court in that case.
We accordingly turn to Defendants’ assertion that, under the Tennessee
Residential Property Disclosure Act (“the Act”), a seller’s obligation to disclose is
limited to the conditions specifically noted on the disclosure form provided by section
66-5-210, which undisputedly does not list “log construction” among the items to be
disclosed.1 Section 66-5-210 provides that the “completed form constitutes . . .
disclosure by the seller[,]” and that, although any form utilized by a seller must “include
all items contained in the form” provided by the section, a seller is not required to use
“the one included in [the] section.” Tenn. Code Ann. § 66-5-210. We observe that the
form specifically includes structural elements such as interior walls, exterior walls,
ceilings, floors, insulation, foundation, slab, and roof. It also includes any “structural
modifications or other alterations or repairs made without necessary permits” or “not in
compliance with building codes.” Section 66-5-201 requires that the required disclosure
“be given in good faith by the owners[.]” Section 66-5-202, moreover, requires that the
owner furnish a disclosure statement “including any material defects known to the
owner.” Section 66-5-202 further provides that the form used “may be” the form
provided by the statute and that whatever form is utilized “must include all items listed
on the disclosure form” provided by the statute.
We agree with Sellers that the form provided by section 66-5-210 does not and, as
a practical matter, cannot contain every item that a seller may be required to disclose to
fulfill the intent of the disclosure statutes. Rather, this Court has found that the
Tennessee Residential Property Disclosure Act requires the owner “to furnish a
residential property disclosure statement to a purchaser regarding the condition of the
property, including any material defects known to the owner.” (emphasis added),
Ledbetter v. Schacht, 395 S.W.3d 130, 135 (Tenn. Ct. App. 2012), perm. app. denied
(Tenn. Jan. 9, 2013).
Additionally, as the Ledbetter court noted, section 66-5-206 “requires the licensee
to inform buyers or sellers whom they represent (and, in some cases, unrepresented
1
The statutory sections insofar as they apply to our discussion of the issues presented on appeal
have remained substantially unchanged since the 2005 transaction at issue in this lawsuit.
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buyers) of their rights and obligations under the Residential Property Disclosure Act.”
Ledbetter, 395 S.W.3d at 135. The section further provides:
If a real estate licensee performs those duties [to inform], the licensee shall
have no further duties to the parties to a residential real estate transaction
under this part, and shall not be liable to any party to a residential real
estate transaction for a violation of this part or for any failure to disclose
any information regarding any real property subject to this part. However, a
cause of action for damages or equitable remedies may be brought against a
real estate licensee for intentionally misrepresenting or defrauding a
purchaser. A real estate licensee will further be subject to a cause of action
for damages or equitable relief for failing to disclose adverse facts of which
the licensee has actual knowledge or notice. “Adverse facts” means
conditions or occurrences generally recognized by competent licensees that
significantly reduce the structural integrity of improvements to real
property, or present a significant health risk to occupants of the property.
Tenn. Code Ann. § 66-5-206 (emphasis added); Ledbetter, 395 S.W.3d at 135. As the
Ledbetter court noted, moreover, “a real estate licensee is not excused from making the
disclosures required by § 62-13-403 of the Real Estate Broker License Act, and the
Residential Property Disclosure Act does not remove or otherwise affect ‘any remedy
provided by law for such a failure to disclose.’” Ledbetter, 395 S.W.3d at 137 (quoting
Tenn. Code Ann. § 66-5-208(d)(2)). Section 62-13-403 provides, in relevant part:
A licensee who provides real estate services in a real estate transaction shall
owe all parties to the transaction the following duties, except as provided
otherwise by § 62-13-405, in addition to other duties specifically set forth
in this chapter or the rules of the commission:
(1) Diligently exercise reasonable skill and care in providing services to all
parties to the transaction;
(2) Disclose to each party to the transaction any adverse facts of which the
licensee has actual notice or knowledge;
....
(4) Provide services to each party to the transaction with honesty and good
faith[.]
Reading the statutory provisions together, we hold that, under section 66-5-202, an
owner’s/seller’s duty to disclose includes an obligation to disclose known “material
defects.” Section 66-5-206 imposes on real estate licensees a duty to inform
owners/sellers whom they represent of that obligation. The section also imposes on real
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estate licensees a duty to disclose “adverse facts” as defined by the section. Section 62-
13-403 requires the licensee to act diligently to exercise reasonable skill and care in
providing services. Section 66-5-206 immunizes a real estate licensee from liability under
the part only if 1) the licensee has fulfilled their duty to inform the sellers or buyers
whom they represent of their duties and obligations and 2) if the licensee has fulfilled
their duty to disclose known adverse facts as defined by the section. See Ledbetter, 395
S.W.3d at 135-36.
As noted above, the trial court awarded summary judgment to Defendants on the
issue of duty upon determining that Mr. Pulse’s duty to advise Sellers to disclose was
limited to those conditions specifically listed on the disclosure form. In light of the
foregoing, we affirm the trial court’s award of summary judgment to Defendants;
however, we do so on a different basis.2 We hold that, under the Tennessee Residential
Property Disclosure Act, a seller has an obligation to disclose known “material defects”
in addition to those conditions specifically listed on the sample form, and a real estate
licensee has a duty to advise his or her client/seller of this obligation.
The plain language of sections 66-5-202 and 66-5-206 requires real estate
licensees to advise their client/sellers to disclose known “material defects” on the
disclosure form, and to disclose “adverse facts” of which the licensee has actual
knowledge or notice. However, the record contains no proof that the log construction, in
and of itself, was a “material defect” that Sellers were required to disclose under section
66-5-202. Further, in defending their prior lawsuit, Sellers maintained that “a log-frame
home is not defective[.]” Odom, 310 S.W.3d at 350. This court has already determined
that the evidence in that case did not demonstrate that the log construction was in itself an
“adverse fact” which Mr. Pulse had a duty to disclose to Buyers. Id. at 353. Likewise,
the record before us contains no proof that the log construction, in and of itself, was an
“adverse fact” which Defendants had a duty to disclose.3 In light of the undisputed facts,
we hold that Defendants are entitled to a judgment as a matter of law on the issue of
breach of their duty to Sellers.
Denial of Sellers’ Motion for Summary Judgment
2
An appellate court may affirm summary judgment on different grounds. Moore v. State, 436
S.W.3d 775, 786 (Tenn. Ct. App. 2014). White v. Empire Exp., Inc., 395 S.W.3d 696, 717 (Tenn. Ct.
App.2012) (citation omitted). See also Collier v. Legends Park LP, 574 S.W.3d 356, 359 (Tenn. Ct. App.
2018).
3
We also determined that the evidence in Odom, 310 S.W.3d 344, did not demonstrate that the
log construction was in itself an “adverse fact” which Mr. Pulse had a duty to disclose to Buyers. Id. at
353.
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We next turn to Sellers’ assertion that, because the trial court erred in its
determination of Mr. Pulse’s duty under the statutes, the trial court erred in denying
Sellers’ motion for summary judgment with respect to breach and causation. In light of
the foregoing discussion of duty as applied to the facts of this case, we disagree.
We begin our discussion of this issue by noting that it is undisputed that neither
Sellers nor Mr. Pulse had any knowledge that the logs beneath the vinyl siding were
deteriorating or defective. Odom, 310 S.W.3d at 349. We additionally reiterate that
Sellers have maintained that log-frame construction in itself is not defective. Id. at 350.
As noted above, the Odom court determined that the evidence in that case did not
demonstrate that the log construction was in itself an “adverse fact” which Mr. Pulse had
a duty to disclose to Buyers. Id. at 353. Unlike the plaintiff/buyers in Odom, Sellers do
not allege fraudulent concealment.4 Rather, Sellers’ argument, as we summarize it, is
that Mr. Pulse’s failure to advise them to disclose the log-frame construction constitutes a
breach of his duty to advise them to disclose “material facts” under section 66-5-202.
Upon review of the record in this case, we observe that the question of Mr. Pulse’s
duty to Sellers under section 66-5-202 has focused on whether the log construction was a
“material fact” which Mr. Pulse had a duty to advise Sellers to disclose. However,
section 66-5-202 requires Sellers to advise Buyers of any “material defects known to the
owner.” Sellers’ expert, Mr. French, stated in his affidavit that, “because the log
construction was an unusual/atypical condition for residential construction and further,
was hidden from view beneath sheet rock and siding so as to not be visible to a potential
buyer, it was a material fact that the seller/client was required to disclose[.]” (emphasis
added). There is nothing in this record, however, to demonstrate that the log construction
was a material defect which Sellers were obligated to disclose under the statute.
This distinction is significant with respect to Sellers’ duty under the statutes. A
material fact is one that is “significant or essential to the issue or matter at hand.” Black’s
Law Dictionary (11th ed. 2019). While a “material defect” is not defined by Black’s, a
“defect,” is defined as an “imperfection or shortcoming[.]” Id. In the trial court, Sellers
did not dispute that “[l]og construction is not a condition which, on its own, reduces the
structural integrity of a house.” Additionally, the record contains a portion of the
deposition of Mr. Hill, buyers’ expert in their action against Sellers in Odom, who
affirmed that “[t]here’s nothing inherently deficient about a log home construction as
opposed to any other if it’s maintained properly[.]”
As previously discussed, the record contains no evidence demonstrating that the
log construction was, in itself, a “material defect” that Sellers were required to disclose
4
A cause of action for fraudulent concealment requires proof that the defendant has concealed
“‘a material fact or condition,’ rather than a defect[.]” Id. at 350. See also id. at 349-351.
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under section 66-5-202. On the contrary, Sellers have argued that they “did not conceal a
defect because a log-frame home is not defective[.]” Odom, 310 S.W.3d at 350.
Accordingly, there is no proof that Defendants had a duty to advise Sellers to disclose the
log construction of the house as a part of the requirements imposed upon them by section
66-5-202. We accordingly affirm the trial court’s denial of Sellers’ motion for summary
judgment.
Conclusion
Our Supreme Court has previously held that,
when the facts material to the application of a rule of law are
undisputed, the application is as a matter of law for the court since there is
nothing to submit to the jury to resolve in favor of one party or the other.
In other words, when there is no dispute over the evidence establishing the
facts that control the application of a rule of law, summary judgment is an
appropriate means of deciding that issue.”
Byrd v. Hall, 847 S.W.2d 208, 214 (Tenn. 1993). In light of our foregoing conclusions
with respect to the applicable law and the undisputed facts in this case, we hold that
Defendants are entitled to a judgment as a matter of law. We accordingly remand this
matter to the trial court with instructions to enter a final judgment in favor of Defendants
in this matter.
This matter is remanded to the trial court for entry of a judgment consistent with
this Opinion. Costs on appeal are taxed to Appellants, Harold Oliver and Patsy Oliver,
and their surety, for which execution may issue if necessary.
s/ Carma Dennis McGee
CARMA DENNIS MCGEE, JUDGE
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