JOE DAVID ERWIN ET AL.
GREAT RIVER ROAD SUPERCROSS LLC ET AL.
Session September 19, 2017
from the Chancery Court for Dyer County No. 15-CV-218 Tony
argument, the parties agreed that the trial court made a
finding concerning the reliance element of Appellants'
fraud claim that was not supported by the record.
Accordingly, we vacate the trial court's order and remand
the case for further proceedings.
R. App. 3 Appeal as of Right; Judgment of the Chancery Court
Vacated and Remanded
R. Creasy, Dyersburg, Tennessee, for the appellants, Joe
David Erwin, and Amanda Rachel Erwin.
Matthew W. Willis, Dyersburg, Tennessee, for the appellees,
Great River Road Supercross, LLC, and Brian Klinkhammer.
Armstrong, J., delivered the opinion of the court, in which
J. Steven Stafford, P.J., W.S., and Arnold B. Goldin, J.,
MEMORANDUM OPINION 
Erwin and Amanda Erwin (together, "Appellants")
entered into an oral agreement to purchase personal and real
property from Great River Road Supercross, LLC ("the
LLC"). The sole member of the LLC is Brian Klinkhammer
(together with the LLC, "Appellees"). The purchase
price was $160, 000.00, and Appellants made a $40, 000.00
down payment. The parties entered into a contract titled
"Real Estate Installment Notes" ("the
Note") for payment of the balance of the purchase price.
The Note required Appellants to make yearly payments of $12,
000.00 for a period of ten (10) years. Appellees executed a
warranty deed, which specifically warranted against
encumbrances. However, when the parties executed the Note,
unbeknownst to Appellants, there was a $20, 000.00 mortgage
on the property, which Mr. Klinkhammer did not pay off at the
time of closing.
parties' agreement provided that certain
property/equipment was included in the sale. Appellants
contend that a 10-foot fiber shank was to remain with the
property. However, unbeknownst to Appellants, the shank was
the property of a third party, who removed it. Rather than
seek injunctive or other relief, in an effort to recoup for
the alleged loss of the shank, Appellants tendered $10,
000.00, as opposed to $12, 000.00, as their first installment
under the Note. Appellants believed that $2, 000.00 was the
approximate value of the piece of equipment that was removed.
Appellees considered this reduced payment to be a material
breach and foreclosed on the property. At the foreclosure
sale, the property was purchased by Mr. Klinkhammer for the
balance of the Note.
April 29, 2015, Appellants filed a Complaint in the Dyer
County Chancery Court ("trial court") for fraud,
breach of warranty, and breach of contract. Appellees filed
an Answer and Counterclaim on July 1, 2015. In the
counterclaim, Appellees averred breach of contract and
conversion by Appellants. The case was heard on October 18,
2016. On December 8, 2016, the trial court entered an order,
granting Appellants a $1, 000.00 judgment against Mr.
Klinkhammer for failure to perform the obligation to deliver
the fiber shank. All other claims asserted by Appellants were
dismissed. Appellants appeal.
1. Whether the trial court erred in finding that
Appellants' fraud claim failed since Appellants did not
rely on the ...