H & J DITCHING & EXCAVATING, INC. V. CORNERSTONE COMMUNITY BANK - Articles

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Posted by: Amelia Ferrell Knisely on Feb 19, 2016

Court: TN Court of Appeals

Attorneys 1:

Arthur F. Knight, III, and Jonathan Swann Taylor, Knoxville, Tennessee, for appellant, H & J Ditching & Excavating, Inc.

Attorneys 2:

P. Edward Pratt, Knoxville, Tennessee, for appellee, Cornerstone Community Bank.

Judge(s): SUSANO

Plaintiff H & J Ditching & Excavating, Inc. (Contractor) was hired by JRSF, LLC (Developer) to perform excavating and grading work on a subdivision construction project (the project) in West Knox County. Defendant Cornerstone Community Bank (Lender) provided financing for the project with a $2,512,500 construction loan. Complications arose, including the bankruptcy of one of Developer?s primary members. Developer defaulted on the construction loan. Lender foreclosed and took possession by bidding on the property at the foreclosure sale. Contractor alleges that it completed the grading and infrastructure work but that it only received 90% of the contract price. Contractor brought this tort action against Lender, alleging intentional and negligent misrepresentation to-wit, by assuring Contractor that the construction loan to Developer was “fully funded” and that Contractor would be paid for its work. The trial court granted Lender summary judgment, finding that (1) Lender made no false or misleading statements and (2) the proximate cause of Contractor?s alleged injury in not receiving its final 10% payment was Contractor?s failure to request and obtain an engineer?s certificate of final completion, a condition precedent to payment under its contract with Developer. We affirm.