Henry v. Nova

IN THE COURT OF APPEALS OF TENNESSEE FILED
AT KNOXVILLE August 17, 1998
Cecil Crowson, Jr.
Appellate C ourt Clerk
PAUL EDW ARD HEN RY, et ux, ) C/A NO. 03A01-9804-CH-00121
ELIZABETH ANN HENRY, )
) KNOX CHANCERY
Plaintiffs-Appellants, )
) HON. FREDERICK D. McDONALD,
v. ) CHANCELLOR
)
NOV A, INC ., ) AFFIRMED
) AND
Defendant-Appellee. ) REMANDED
DONALD E. OVERTON and GLENNA W. OVERTON, OVERTON & OVERTON,
Knoxville, for Plaintiffs-Appellants.
BEECHER A. BARTLETT , JR., KRAMER, RAYSON, LEAKE, RODGERS &
MORGA N, Knoxville, for Defendant-Appellee.
O P I N IO N
Franks, J.
In this action, plaintiffs sued defendant for “money damages” on the
grounds of “misrepresentation, mutual mistake, breach of warranty and negligence
regarding th e purchas e of a new residence” from def endant. Th e recision of the sale
was also s ought.
The Chancellor granted defendant summary judgment, stating:
[T]he plaintiffs have testified by affidavit that about one month after
closing on September 29, 1993, they noticed a large, swift stream
flowing through their back yard. Therefore, the Court finds that
plaintiffs’ cause of action accrued approximately one month after
Septemb er 29, 1993 , and suit filed b y plaintiffs on M arch 10, 19 97 is
barred by the statute of limitations.
Plaintiffs have raised several issues which may be condensed into two
issues for co nsideration. F irst, they insist that the fo ur-year implied warranty
recognized in Dixon v. Mou ntain C ity Con structio n, 632 S.W .2d 538 (T enn. 1982 ), is
applicable to the facts of this case, and that the statute o f limitations do es not bar th eir
action for fraud, misrepresentation, negligence and violation of the Consumer
Protection A ct.
The record establishes that plaintiffs purchased a newly-constructed
residence from defendant on September 29, 1993. At the time of purchase plaintiffs
received a “new home limited warranty” for a period extending from September 19,
1993 through September 29, 1994. Approximately one month after closing, plaintiffs
noticed a large swift stream flowing through their back yard, and complained to the
defendant about the flooding problem, pursuant to the express warranty. Defendant
made attempts in March and May of 1994 to correct the flooding problem by
constru cting a s wale, b ut the pr operty co ntinued to flood .
On the authority of Dixon, plaintiffs argu e that they are en titled to rely
on an implied warranty of good workmanship, materials and fitness for habitation,
which would extend for four years. However, the Dixon Court limited implied
warranties to sales “only when the written contract is silent” and held that vendors and
purchasers were free to contract in writing for a warranty upon different terms and
conditions o r to expressly disc laim any wa rranty. In this case, th e written w arranty
provided by defendant to plaintiffs is styled “a new home limited warranty” and the
first paragraph thereof states in bold letters:
THIS WARRANTY IS IN LIEU OF ANY AND ALL OTHER
WARRANTIES, WHETHER EXPRESS OR IMPLIED
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WARRANTIES OF HABITABILITY OR MERCHANTABILITY.
and sets forth the specific matters warrantied, and that it was for a one-year period
from the date of transfer of title or of the owners taking physical possession,
whichever was first. The written one-year express warranty in this case was a part of
the contract of sale. Plaintiffs accepted this warranty at closing, without protest, and
subsequently relied on the warranty in making claims against the seller. The
contractual warranty clearly disclaimed all other warranties, including implied
warranties viable in Dixon. Accordingly, the implied warranty pursuant to T.C.A.
§47-2-725 for a period of four years was rendered inapplicable by the contract of the
parties, which effectively limited the warranties to those expressed in the written
contrac t.
The grav amen of the comp laint is essentially for m oney dama ges, and it
is alleged that “the fair market value of plaintiffs’ property has either been destroyed
or has a fair market value far less than the purchase price”. The applicable statute of
limitations for actions for injury to real property is T.C.A. §28-3-105, and requires that
such actions must be brought within three years. In Prescott v. Adams, 627 S.W.2d
134 (Tenn. App. 1982) the plaintiff had sued for recovery on theories of fraud,
misrepresentation, negligence, breach of fiduciary duty and breach of implied
warranties and rescission of the contract. The Prescott Court held:
Since the gravamen of the complaint in this case is for damages to real
property, we think all of the theories advanced by the plaintiffs are
govern ed by the three-yea r statute o f limitatio ns. (Em phasis s upplied ).
Id. p. 137.
Since this action was filed more than three years after the “discovery” of
the damage to plaintiffs’ property, we hold the statute of limitations bars this action,
and the judgment of the Chancery Court is affirmed.
The cause is remanded with costs of the appeal assessed to appellants.
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__________________________
Herschel P. Franks, J.
CONCUR:
___________________________
Houston M. Godd ard, P.J.
___________________________
Don T. McM urray, J.
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