Harjes v. Russell

• Court: Court of Appeals of Tennessee
• Decided: May 21, 1999
• Docket: 03A01-9810-CH-00321
• Status: Published

Opinion

IN THE COURT OF APPEALS OF TENNESSEE FILED AT KNOXVILLE May 21, 1999

Cecil Crowson, Jr. Appellate C ourt ALBERT C. HARJES, III, and ) C/A NO. Clerk 03A01-9810-CH-00321 wife, MARY DENISE HARJES, ) ) Plaintiffs-Appellees, ) ) ) v. ) ) ) ) APPEAL AS OF RIGHT FROM THE ) HAMILTON COUNTY CHANCERY COURT JEWELL I. RUSSELL, ) ) Defendant-Appellant, ) ) and ) ) ) DONNA RUSSELL, ) ) HONORABLE HOWELL N. PEOPLES, Defendant. ) CHANCELLOR

For Appellant For Appellees

JEWELL I. RUSSELL JAMES W. CLEMENTS, III Pro Se Kennedy, Fulton, Koontz & Woodbury, Tennessee Farinash Chattanooga, Tennessee

O P I N IO N

AFFIRMED AND REMANDED Susano, J.

1 Plaintiffs Albert C. Harjes, III, and his wife, Mary

Denise Harjes, filed this action against Jewell I. Russell1 and

her daughter, Donna Russell, seeking damages for the Russells’

alleged misrepresentations in connection with the sale of the

Russells’2 residence to the plaintiffs. Following a bench trial,

the court found that Jewell I. Russell (“Russell”)3 had made a

misrepresentation regarding the existence of water problems on

the subject property. Accordingly, the trial court awarded the

plaintiffs damages of $2,950, which amount represents the cost of

repairs to the property.4 Russell appealed, raising several

issues for our consideration:

1. Did Russell have a reasonable belief that a previously-existing water problem had been resolved two years earlier?

2. Did the trial court err in finding that a water problem existed at the time of the sale of the home?

3. Did the trial court err in finding that a septic system problem, created by Russell’s efforts to correct the alleged water problem, existed at the time of the sale of the home?

4. Did the trial court err in finding that Russell misrepresented the condition of the property to the plaintiffs?

5. Was this action barred by the statute of limitations set forth at T.C.A. § 66-5-208?

1 Mrs. Russell is a widow. 2 The respective interests of Mrs. Russell and her daughter in the property are not reflected in the record. 3 For ease of reference, we will refer to the defendant Jewell Russell as “Russell,” and to her daughter as “Donna Russell.” 4 The trial court dismissed the claim against Donna Russell. It also dismissed the Russells’ third party complaint against the builder of the subject house, David Freeman. Finally, the trial court denied the plaintiffs any further damages for additional repairs or for their alleged mental anguish. None of these determinations are at issue on this appeal.

2 I

In February, 1996, the plaintiffs contracted with the

Russells to purchase the latter’s home in Ooltewah, Tennessee.

The plaintiffs had visited the house on at least two occasions

prior to entering into the contract. On one of these visits, Mr.

Harjes noticed straw in the back yard. Russell told him that she

had placed the straw there after installing downspouts to help

with water drainage. According to Mr. Harjes, he then asked

Russell whether she had experienced any water problems, and she

responded in the negative. Furthermore, the Residential Property

Condition Disclosure statement signed by the Russells prior to

the sale indicates that the septic system was in operating

condition and free of any significant defects or malfunctions.

The record indicates, however, that Russell had in fact

experienced various water-related problems on the property prior

to the sale. Following heavy rain and flooding in April, 1994,

she had written a letter to the Tennessee Real Estate Commission,

in which she stated as follows:

...raw sewage is draining from my septic tank into the drainage ditch between my lot and lot 264. This raw sewage is coming from my septic tank because it was not installed properly. Raw sewage is also draining into a ditch about 20 feet from my property line in the back....

* * *

My yard has completely washed away, my septic tank was not installed properly... water stands under my home at the foundation all the time....

3 The property subsequently was inspected by Richard

Henderson of the Hamilton County Health Department. At that

time, Henderson observed raw sewage coming out into the drainage

ditch; he recommended the installation of a “curtain” drain to

alleviate the problem. However, Russell apparently chose to

pursue other methods of improving the water drainage. She

installed several corrugated drainage pipes in the yard and added

topsoil and sod to the yard.

In July, 1994, Henderson returned to the Russells’

residence in response to a complaint from a neighbor, but he did

not observe any sewage on that occasion. Another complaint

apparently was made in March, 1995; at that time, a second Health

Department employee inspected the ditch, but reported finding no

sewage therein.

As noted earlier, Russell had also placed straw in the

back yard after installing downspouts to help disperse water away

from the house. Approximately two to three weeks after moving

into the home, the plaintiffs noticed a muddy spot where the

straw had been placed in the yard. They discovered that water

was bubbling up from this area whenever the toilets were flushed.

The plaintiffs subsequently contacted the parties’ respective

real estate agents, but nothing was done to alleviate the

problem. Finally, on May 7, 1996 -- after the plaintiffs had

moved into the house -- Henderson responded to a request by Mrs.

Harjes for a consultation. Upon inspection of the property, he

again observed sewage coming out into the drainage ditch. At

trial, Henderson testified that excessive water in the yard could

4 affect the septic system, and that if sewage is emanating from

drainage pipes, he would suspect that it was leaking into the

drainage system from the sewer lines. He also testified that

efforts to alleviate water problems, such as placing topsoil over

the yard and installing drainage pipes close to the sewer lines,

could contribute to the sewage problems.

Although the problem abated during the drier summer

months, it reappeared in September or October. According to Mr.

Harjes, the problem became more severe at that time, and he

observed sewage flowing out of three drainage pipes into the

ditch. Mrs. Harjes testified that the problem continued to get

worse, and that she began to experience various problems with her

washing machine, sink, toilet and dishwasher. In February, 1997,

Mrs. Harjes noticed what she believed to be washing powder and

toilet paper in the drainage ditch.

The plaintiffs’ next-door neighbors, James and Terri

Hoff, also testified at trial. Mr. Hoff testified that he had

smelled sewage and observed water, soap suds and toilet paper in

the ditch while the Russells lived there. Mrs. Hoff testified

that she had not seen any sewage in the ditch prior to the

plaintiffs’ arrival. However, she testified that, while the

Russells were still living there, Donna Russell had told her that

there was sewage in the ditch.

The plaintiffs ultimately had the septic system

repaired in August, 1997, at a cost of $2,950. They filed this

lawsuit shortly thereafter.

5 6 II

In this non-jury case, our review is de novo upon the

record, with a presumption of correctness as to the trial court’s

factual determinations, unless the preponderance of the evidence

is otherwise. Rule 13(d), T.R.A.P.; Union Carbide Corp. v.

Huddleston, 854 S.W.2d 87, 91 (Tenn. 1993). The trial court’s

conclusions of law, however, are afforded no such presumption.

Campbell v. Florida Steel, 919 S.W.2d 26, 35 (Tenn. 1996);

Presley v. Bennett, 860 S.W.2d 857, 859 (Tenn. 1993).

We also note that the trial court is in the best

position to assess the credibility of the witnesses; therefore,

such determinations are entitled to great weight on appeal.

Massengale v. Massengale, 915 S.W.2d 818, 819 (Tenn.App. 1995);

Bowman v. Bowman, 836 S.W.2d 563, 566 (Tenn.App. 1991). In fact,

we have previously noted that

...on an issue which hinges on witness credibility, [the trial court] will not be reversed unless, other than the oral testimony of the witnesses, there is found in the record clear, concrete and convincing evidence to the contrary.

Tennessee Valley Kaolin Corp. v. Perry, 526 S.W.2d 488, 490

(Tenn.App. 1974).

With regard to misrepresentation claims, the Supreme

Court has held that

7 [t]o prevail on a claim of misrepresentation, the plaintiff must show that the defendant knowingly or recklessly made a false representation as to a material fact which was justifiably relied upon by the plaintiff, and that damages were suffered by the plaintiff as a result of the reliance.

Speaker v. Cates Co., 879 S.W.2d 811, 816 (Tenn. 1994).

III

Following a bench trial, the trial court found that the

property did in fact have water problems, which Russell had

sought to cover up with straw; that Russell had misrepresented

the facts with regard to the existence of water problems; that

the misrepresentation was false when made; that the

misrepresentation pertained to a material fact, in light of the

parties’ testimony to that effect, as well as the fact that Mr.

Harjes had specifically inquired whether Russell had experienced

any water problems; that the plaintiffs had not had an

opportunity to discover the problem when inspecting the house and

had thus reasonably relied upon Russell’s assurances; and

finally, that the plaintiffs had been damaged by the

misrepresentation, in that they were forced to pay for repairs to

alleviate the problem.

Upon review of the record, we are of the opinion that

the evidence does not preponderate against the trial court’s

findings. The record contains evidence that Russell had

experienced extensive water problems on the property, and that

she was aware that her septic system was not properly installed.

8 The record also indicates that she took various steps to attempt

to alleviate the water problems, including the addition of

topsoil and the installation of various drains and pipes in the

yard. The testimony of Henderson and Mr. and Mrs. Hoff, which

was accredited by the trial court, indicates that sewage was

present in the drainage ditch prior to the sale of the Russells’

residence. It is also clear that Russell was experiencing some

degree of water problems at the time of the sale of the property,

as evidenced by the fact that she had installed downspouts and

placed straw in the yard.

We do not find that the evidence preponderates against

the trial court’s finding that these water problems, and

Russell’s efforts to correct them, caused or contributed to the

sewage problems at the residence. By the same token, it is clear

that Russell specifically told Mr. Harjes, in response to his

inquiry, that she did not have any water problems on the

property. The plaintiffs testified, however, that they began

experiencing various problems within two or three weeks of moving

into the home. Under these circumstances, we cannot agree with

Russell’s assertions that she had a reasonable belief that the

septic system was functioning properly and that water problems on

the property did not cause the failure of the septic system.

Accordingly, we hold that the trial court was not in error in

determining that a misrepresentation occurred and that the

plaintiffs were entitled to damages as a result. See Speaker,

879 S.W.2d at 816.

9 Our decision is buttressed by the fact that the trial

court was in the best position to assess the credibility of the

witnesses. Massengale, 915 S.W.2d at 819; Bowman, 836 S.W.2d at

566. Clearly, the outcome of this case depended on the

resolution of issues that hinged on the credibility of the

witnesses. The trial judge obviously accredited the testimony

favorable to the plaintiffs’ theory of the case. Having found no

“clear, concrete and convincing evidence to the contrary,” we are

in no position to reverse the decision of the lower court.

Tennessee Valley Kaolin Corp., 526 S.W.2d at 490.

IV

Russell also advances other theories on this appeal.

She contends that the plaintiffs’ cause of action is barred by

the one-year statute of limitations set forth at T.C.A. § 66-5-

208 (Supp. 1998). That section, which is part of the Residential

Property Disclosures Act, T.C.A. § 66-5-201, et seq. (Supp.

1998), provides in pertinent part that

[a]ny action brought under this subsection shall be commenced within one (1) year from the date the purchaser received the disclosure statement or the date of closing (or occupancy if a lease situation), whichever occurs first....

T.C.A. § 66-5-208(a)(1) (Supp. 1998).

However, regardless of whether this action was filed

within the above limitations period, we agree with the

plaintiffs’ assertion that the applicable statute of limitations

10 is instead found at T.C.A. § 28-3-105(1) (Supp. 1998). That

section provides, among other things, that actions for injuries

to real property shall be commenced within three years of the

accrual of the cause of action. We also agree with the

plaintiffs’ assertion that, although the disclosure statement was

relied upon as evidence of Russell’s misrepresentations, the

applicable portion of their complaint was based upon common law

fraud and misrepresentation. We have previously held that where

the gravamen of the complaint is a claim for damages to real

property -- as is the case here -- the three-year limitations

period set forth in T.C.A. § 28-3-105(1) controls. Prescott v.

Adams, 627 S.W.2d 134, 137 (Tenn.App. 1981); see also Swauger v.

Haury & Smith Contractors, 512 S.W.2d 261, 262-63 (Tenn. 1974).

In the instant case, it is clear that the complaint was filed

well within the applicable limitations period. See T.C.A. § 28-

3-105(1). Accordingly, we find this issue to be without merit.

Finally, Russell asserts in the argument section of her

brief that the plaintiffs “did not come to court with ‘clean

hands.’” The record, however, contains no support whatsoever for

this theory, and it is therefore found to be without merit.

V

The decision of the trial court is affirmed. Costs on

appeal are taxed to the appellant. This case is remanded to the

11 trial court for enforcement of the judgment and the collection of

costs assessed there, all pursuant to applicable law.

__________________________ Charles D. Susano, Jr., J.

CONCUR:

________________________ Houston M. Goddard, P.J.

________________________ William H. Inman, Sr.J.