The opinion
IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE FILED
June 26, 1998
DAV ID A. W ILHO ITE, S R., ET UX., Cecil Crowson, Jr.
) C/A NO. 03A01-9801-CH-00004
Appellate C ourt Clerk
)
Plaintiffs-Appellants, ) COCKE CHANCERY
)
v. ) HON . CHE STER S. RA INW ATE R, JR.,
) CHANCELLOR
NINA B. PR OFF ITT, E T AL ., )
) AFFIRMED AND
Defendants-Appellees. ) REMANDED
JAMES M . CRAIN, Knoxv ille, for Plaintiffs-Appellants.
CLYDE A. DUNN, Newport, JAMES McSWEEN and FRED HOLT, McSWEEN &
McSWEEN , Newport, and JAMES RIPLEY, SHARP & RIPLEY, Sevierville, for
Defendants-Appellees.
O P I N IO N
Franks, J.
In this action plaintiffs sought rescission of the purchase of a motel or
damages, based upon alleged fraudulent misrepresentations during negotiations for the
purchase. Plaintiffs sued the owners, a real estate firm, Barbara’s Real Estate, and the
Trustee. On September 8, 1994, plaintiffs agreed to purchase the property and
received a deed to the property on September 13, 1994. They elected not to make any
payments on their loan an d the prop erty was fore closed in N ovembe r, 1995. Th is
action was filed prior to foreclosure on February 7, 1995.
Defendant Barbara’s Realty filed a motion for summary judgment which
was ultimately granted by the Trial Judge. The gravamen of plaintiffs’ complaint was
that when they first contacted a representative of Barbara’s Realty on July 22, 1994,
they were advised by the representative that there would be new highway construction,
making the highway “coming by the motel” into four lanes which would be completed
in two to three years. The existing highway at that time comprised two lanes. After
the sale was consummated, plaintiffs contacted the State Highway Department and
determined that while there were plans to build a four lane highway in the vicinity, the
planned h ighway did n ot go by the m otel.
Barbara’s Real Estate essentially argued in their motion that the
representations did not constitute actionable fraud, citing Oak Ridge Precision v. First
Tennessee Bank, 835 S.W.2d 25 (Tenn. App. 1992). We agree for reasons hereinafter
set forth.
Subsequent to the grant of the summary judgment, plaintiffs amended
their complaint to state that they had inquired of Barbara’s representative about the
financial records of the motel, in order that they could judge the profitability of the
operation, and they were advised that the motel had been “shut down for the
proceeding two years” and consequently there were no records available, when in fact
the motel had been in operation. After the trial, the Chancellor, without a jury, found
that the evidence did not “sustain fraud” on the part of the defendants. The Judge
said:
This Court finds that the plaintiffs have wholly failed to sustain or show
by a preponderance of the evidence, any evidence of fraud on the part of
these defendants or any one of these defendants. The manner was
handled completely above board. The parties had available to them any
and all knowledge that a reasonable and responsible person would seek,
and had the me ans of obtaining it if they had so see n fit, and they can’t
come in a t a later date an d seek to h ave som ething set asid e because , in
retrospect, it app ears to be an unwise d ecision on th eir part.
The evid ence doe s not prepo nderate ag ainst the Ch ancellor’s fin ding, T.R .A.P. Rule
13(d).
We note that the real estate agent allegedly making the representations
to plainti ff w as Tom G ools by, an d pla intif f testified tha t he c onta cted Mr. Goo lsby,
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and plaintiff further characterized Mr. Goolsby as “our real estate agent”.1 He further
elaborated:
[W]e authorized him to present the offer and negotiate the transaction
for the mo tel.
The record demonstrates that plaintiffs essentially made no independent investigation
or checks on the motel property prior to purchase. Plaintiff David Wilhoite explained:
I’ve gone through a lot of real estate transactions in California, and I had
done research and had been very successful at buying and selling real
estate, and alw ays made m oney. But as I w as making preparation s to
come home, I pretty much let my guard down thinking I was dealing
with go od han dshak e peop le. . . .
As to plaintiffs’ contention that the agent fraudulently misrepresented that the motel
had not been in operation in the last two years, the record establishes that plaintiff
could have readily ascertained the motel had, in fact, been in operation. Moreover, the
evidence preponderates that this statement was not an inducement to plaintiffs’
purchasing the motel. As for the representation as to the location of a new four lane
highwa y, the record also shows th at this inform ation could have bee n readily
ascertained by plaintiff, wh ich was d emonstra ted by the fact th at the plaintiff readily
obtaine d infor mation as to the location shortly af ter purc hasing the mo tel.
We believe the Rule set forth in Winste ad v. F irst Ten nessee Bank , N.A.,
Mem phis, 709 S.W.2d 627 (Tenn. App. 1986) controls. There, this Court said:
[W]here the mean s of inform ation are at ha nd and eq ually accessible to
both parties, so that with ord inary prudenc e or diligenc e, they might rely
on their own judgment, generally they must be presumed to have done
so, or, if they have not informed themselves, they must abide the
consequences of their own inattention and carelessness. Unless the
representations are such as are calculated to lull the suspicions of a
careful m an into a co mplete relian ce thereon , it is not comm only held, in
the absence of special circumstances, that, where the means of
knowledge are readily available, and the vendor or purchaser as the case
may be, has the opportunity by investigation or inspection to discover
the truth with respect to matters concealed or misrepresented, without
1
The multiple listing agent for the sale of the motel was ERA Pioneer Realty of Sevierville.
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prevention or hindrance by the other party, of which opportunity he is or
should be aware, and where he nevertheless fails to exercise that
opportunity and to discover the truth, he cannot, thereafter assail the
validity of the co ntract for fra ud, misrepr esentation o r concealm ent with
respec t to matte rs whic h shou ld have been a scertain ed. . . .
709 S.W.2d at 633.
We affirm the Chancellor’s finding that plaintiffs failed to establish
actiona ble frau d by a pre ponde rance o f the ev idence .
We have considered all issues raised by the plaintiffs, find them to be
without merit, and affirm the judgment of the Trial Court and remand with costs of the
appeal assessed to appellants.
__________________________
Herschel P. Franks, J.
CONCUR:
___________________________
Don T. McM urray, J.
___________________________
Charles D. Susano, Jr., J.
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