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Posted by: Tanja Trezise on Jun 12, 2015

Court: TN Court of Appeals

Attorneys 1:

Jon G. Roach and Brian R. Bibb, Knoxville, Tennessee, for the appellant, Patricia Grissom.

Attorneys 2:

James B. Johnson, Nashville, Tennessee, for the appellee, Fredrico A. Dixon, III.

Judge(s): FRIERSON

The dispute central to this interlocutory appeal involves a failed real estate transaction and alleged breach of a real estate agent‘s fiduciary duty to her client. The plaintiff buyer entered into an agreement to purchase improved real property from the seller but failed to obtain financing to complete the purchase. In a previous action brought by the seller against the buyer, the trial court found that the buyer‘s attempted termination of the contract was ineffective and that he therefore breached the contract. On appeal, this Court affirmed that judgment in favor of the seller. The buyer subsequently brought the instant action against the defendant real estate agent, alleging breach of fiduciary duty based on the agent‘s failure to confirm delivery of the buyer‘s credit declination letter to the seller. The agent filed a motion for summary judgment, averring that the buyer had filed this action outside the time parameters of the applicable statute of limitations. Following a hearing, the trial court applied the discovery rule to find that knowledge of the agent‘s alleged failure to terminate the contract could not be imputed to the buyer before April 22, 2010, when the seller‘s counsel had raised the issue during trial in the original action. Upon therefore determining that the buyer had commenced this action within the applicable three-year statute of limitations, the trial court denied the agent‘s motion for summary judgment. The agent sought permission to file an interlocutory appeal, which the trial court granted upon the certified issue of when the statute of limitations began to run. This Court subsequently granted permission for interlocutory appeal pursuant to Tennessee Rule of Appellate Procedure 9. We determine that the buyer knew or should have known that he had a potential cause of action against the agent by August 10, 2009, when he admittedly had knowledge of a facsimile transmission from the seller alleging that she had not received the termination documentation and demanding distribution to her of the seller‘s earnest money deposit. Having therefore determined that the statute of limitations began to run more than three years before the buyer commenced this action, we reverse the trial court‘s judgment and grant summary judgment in favor of the agent.