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McCollum v. Peters

Court of Appeals of Tennessee, Knoxville

July 23, 2015

ROBERT McCOLLUM, et al.
v.
DARRELL PETERS

Session: May 15, 2015.

Appeal from the Circuit Court for Washington County No. 31032 Thomas J. Seeley, Jr., Judge.

Thomas A. Peters, Kingsport, Tennessee, for the appellant, Darrell Peters.

Jason S. Shade, Johnson City, Tennessee, for the appellees, Robert McCollum and Kimberly McCollum.

CHARLES D. SUSANO, Jr., C.J., delivered the opinion of the court, in which D. Michael Swiney and John W. McClarty, JJ., joined.

OPINION

CHARLES D. SUSANO, JR., CHIEF JUDGE

I.

Plaintiffs filed suit against Defendant on November 9, 2012, followed by an amended complaint in January 2013. Their amended complaint alleges, in part, as follows:

[P]rior to January 22, 2008, Plaintiffs and the Defendant entered into extensive negotiations with respect to the construction of a detached, three car garage . . . located at the Plaintiffs' residence. . . . During these conversations, Defendant represented to the Plaintiffs that he was insured and that he had a valid contractor's license for the state of Tennessee.
As a result of these assurances, Plaintiffs and the Defendant entered into a contract on or about January 22, 2008, for the construction of a detached, 24' x 36' three car garage at the Plaintiffs' Residence. . . .
Among other things, the Contract stated and the Defendant represented that the Garage would be constructed with a (1) "4" concrete floor with 6" x 6" wire mesh or fiber" and (2) "12" block below ground level with concrete and steel." In addition, the Contract stated that the Defendant would . . . furnish materials and labor to complete the construction of the Garage for a price of $21, 194.00.
Throughout the Winter and Spring of 2008, Defendant worked on the Garage. During the construction, and given the representations of the Defendant, Plaintiffs were under the impression that the Garage was being built and constructed pursuant to the specifications of the Contract. As a result, Plaintiffs paid the Defendant $21, 194.00 for the construction that they thought Defendant had performed.
On or about July 22, 2012, the rear masonry wall of the structure failed and collapsed into the Garage which resulted in a considerable amount of damage to the Garage as well as the Plaintiffs' personal property including, but not limited to, three vehicles, tools and a motorcycle.
Subsequent to the collapse of the rear masonry wall, Plaintiffs discovered that the Garage was not constructed in a workmanlike manner and was not constructed pursuant to [] either the specifications enumerated in the Contract or the representation made by the Defendant. Among other things, it was discovered that the Garage: (1) was not constructed with a "4" concrete floor with 6" x 6" wire mesh or fiber, " (2) was not constructed with "12" block below ground level with concrete and steel, " and (3) was incorrectly constructed with the drain pipe resting above the footers with no gravel around it. As a result of such construction, the masonry wall collapsed given that it could not withstand the lateral earth pressure exerted by the retained soil.
In addition, and subsequent to the collapse of the rear masonry wall, Plaintiffs discovered that Defendant was not a licensed Tennessee contractor as was represented prior to and during the construction of the Garage.

In his answer, Defendant generally denied Plaintiff's allegations. He asserted that Plaintiffs' complaint was barred by the statute of repose, see Tenn. Code Ann. § 28-3-202 (2000), and should be dismissed. Further, Defendant denied "that the garage was not constructed in workmanlike manner in accordance to the contract, " and denied that he "does not have a license from the State of Tennessee." As to the parties' contract, Defendant asserted that it "speaks for itself." Lastly, Defendant averred that the garage was built on Plaintiffs' property, with all work and materials visible to them during construction.

After a hearing, the trial court denied Defendant's motion to dismiss. In February 2014, the case was mediated, but without success. In June 2014, after the first trial judge recused herself, Defendant filed a second motion to dismiss which again alleged that the cause of action was barred by the statute of repose. After a hearing before the new trial judge, the motion to dismiss was again denied.

Trial was held on July 17, 2014. In addition to Plaintiff Robert McCollum and Defendant, the court heard testimony from Harold Ioerger, an expert in the field of civil and geotechnical engineering, and Wayne Bailey, a licensed general contractor. Generally summarized, the proof shows that the parties contracted for the construction of a garage with reinforced concrete block. Defendant took the position, however, that such was neither requested by Plaintiffs nor required, so he instead used hollow blocks. After the back wall of the garage collapsed, Plaintiffs employed Mr. Bailey's company to demolish the existing structure and rebuild the garage. The garage was rebuilt to the original specifications at a cost of $35, 700. Mr. Bailey used concrete and steel reinforced blocks, footers, and drainage. Mr. Bailey testified he "wouldn't even think about" building the garage, without using reinforced concrete blocks given the slope of the land and the influx of water at the site.

In its September 14, 2014 final judgment and order, the trial court found that the underlying facts were as stated in the complaint. In support of its ruling in favor of Plaintiffs, the trial court further found, in pertinent part, as follows:

Defendant supplied false information to Plaintiffs in relation to the Contract and the construction of the garage. Specifically, Defendant intentionally misrepresented material facts with respect to the method of construction including that the Garage would be constructed with 12" block below ground level with concrete and steel. Defendant made a promise to the Plaintiffs that he was going to put concrete and steel in the rear masonry wall of the Garage which was a material matter in relation to the construction of the wall. At the time the representation was made, Defendant did not intend to perform his obligations as represented to the Plaintiffs and as enumerated in the Contract. In fact, at the time the garage wall was built, the Defendant merely was going to build the Garage comparable to all of his other garages and not reinforce the back wall. The Plaintiffs were unaware that Defendant did not intend to perform as promised. The Plaintiffs justifiably relied upon the
Defendant's misrepresentations by executing the Contract and continuing a business relationship with the Defendant. The Plaintiffs were justified in relying on the promise and representations made by the Defendant and, as result of relying on the promise and representations, they sustained damages as set forth below.
Defendant argues that the Court should dismiss the Amended Complaint filed against him due to the fact that Plaintiffs' Complaint is barred by the statute of repose enumerated in Tenn. Code Ann. § 28-3-202. Notwithstanding the language of [Section] 28-3-202, Plaintiffs can maintain a cause of action against the Defendant given the language contained in Tenn. Code Ann. § 28-3-205(b) . . . . In this instance, Defendant is guilty of promissory fraud in that he engaged in fraudulent conduct with respect to the construction of the Garage as set forth herein.
In addition, Defendant was not a licensed Tennessee contractor as was represented prior to and during the construction of the Garage. Although Defendant maintained a business license issued through Sullivan County[, ] he did not possess a valid Tennessee contractor's license. As such, Defendant violated the [TCPA]. As a result of the aforementioned violations, Plaintiffs sustained damages as set forth below.
As a direct, proximate and forseeable result of the misrepresentations and the actions of the Defendant . . ., Plaintiffs[] sustained the following damages:
a. $25, 006.00 for the removal and replacement of the Garage; and
b. $6, 000.00 for the depreciation in value for the Porsche 928, Porsche 911 and Infinity automobiles.
In addition, pursuant to § 47-18-109(e)(1) of the [TCPA], Plaintiffs are entitled to receive their reasonable attorney's fees and costs in bringing this action in the amount of $15, 097, 50.
Finally, Plaintiffs are entitled to punitive damages in the amount of $10, 000.00. The Court finds that there is clear and convincing evidence that Defendant acted recklessly with regard to the representations that were made in connection with the construction of the Garage. More specifically, Defendant was reckless in that he was aware of the representations that were made but consciously disregarded those representations and did not have the intent to do what was promised and represented to the Plaintiffs with respect to the method of construction of the Garage.

(Italics in original.) Consistent with its findings, the trial court awarded Plaintiffs a judgment in the total amount of $56, 103.50, plus interest, and taxed costs of the action against Defendant. Defendant filed a timely notice of appeal.

II.

As taken verbatim from his brief, Defendant raises the following issues for our review:

1. Whether the Trial Court erred in not considering lack of mitigation of their damages on the part of the Plaintiffs, in awarding Plaintiffs the sum of $25, 006.00 in compensatory damages.
2. Whether the Trial Court erred in ruling the Defendant recklessly violated the [TCPA].
3. Whether the Trial Court erred in awarding the Plaintiffs $10, 000.00 ...

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