SCOTT BAKER ET AL. v. LARRY BASKIN ET AL. - Articles

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Posted by: Azya Thornton on Dec 30, 2024

Court: TN Court of Appeals

Attorneys 1: J. Ross Pepper, Nashville, Tennessee, for the appellants, Larry Baskin and Linda Baskin.

Attorneys 2: Jean Dyer Harrison, Nashville, Tennessee, for the appellees, Julie Baker and Scott Baker.

Judge(s): CLEMENT

Buyers of a residential home brought action against sellers for 1) breach of contract, 2) negligent misrepresentation, 3) negligence, 4) negligence per se, 5) gross negligence, 6) residential disclosures violations, and 7) fraud. The claims arise from the discovery of a sinkhole months after the sale. The sinkhole was not indicated “through the contour lines on the property’s recorded plat,” see Tenn. Code Ann. § 66-5-212(c) (2015), and the sellers insist they had no knowledge of a sinkhole on the property. For these reasons, they did not disclose the existence of the sinkhole on the Tennessee Residential Property Condition Disclosure form. Nevertheless, the proof at trial established that one of the sellers, Larry Baskin, while mowing the lawn, discovered a depression in the yard six months prior to listing the property for sale, which he believed to be caused by rotting roots from a tree that had been removed years earlier. He filled the depression with two four-by-four, pressure- treated, rot-resistant posts and topsoil. Because it was near a downspout, he also placed the plastic bag from the topsoil over the posts, which he covered with more soil and grass. The property was sold seven months later, during which time Mr. Baskin did not notice the area “concaving or dipping in any way” even though he mowed regularly over the area with his 500-pound riding mower. Following a bench trial, the court dismissed all claims except the negligence claim. Significantly, the court dismissed the claim for negligent misrepresentation because the purchase agreement contained an “as is” clause. However, the court held that Larry Baskin was liable under the claim for common law negligence, finding that he “breached the duty of reasonable care by not informing the Buyers of the existence of the hole prior to their purchase of the Property. The harm resulting from Mr. Baskin’s breach was damage to the value of the Property.” The court awarded the buyers compensatory damages of $55,000 for the diminution in value of the property. Additionally, finding the buyers to be the prevailing parties according to the purchase agreement, the trial court awarded them attorney’s fees and costs. This appeal followed, with the sellers challenging Mr. Baskin’s liability under the negligence claim and the buyers challenging the dismissal of the gross negligence claim. For the reasons explained below, we affirm the dismissal of the claim for gross negligence; however, we reverse the finding of Mr. Baskin’s liability based on the claim of negligence because “a seller’s liability for the failure to disclose such material facts in a real estate transaction is coextensive with a party’s liability for fraudulent or negligent misrepresentation.” Fayne v. Vincent, 301 S.W.3d 162, 177 (Tenn. 2009). Because we have affirmed the dismissal of the claim for gross negligence and reversed the ruling concerning the negligence claim, we also vacate the award of damages and attorney’s fees to the buyers. In that the sellers are now the prevailing parties, we remand with instructions to award the sellers the reasonable and necessary attorney’s fees and costs they are entitled to recover pursuant to the parties’ contract.

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