                                                                                         09/18/2019
               IN THE COURT OF APPEALS OF TENNESSEE
                           AT NASHVILLE
                                  May 7, 2019 Session

       RACHEL MADDOX v. OLSHAN FOUNDATION REPAIR AND
          WATERPROOFING CO. OF NASHVILLE, L.P., ET AL.

               Appeal from the Chancery Court for Davidson County
                No. 12-657-I      Claudia Bonnyman, Chancellor
                     ___________________________________

                           No. M2018-00892-COA-R3-CV
                       ___________________________________


This appeal involves a homeowner’s fraud claim against a foundation repair company.
The trial court rejected the foundation repair company’s argument that the fraud claim
was barred by the statute of limitations and the statute of repose. After a three-day bench
trial, the trial court found that the foundation repair company had engaged in fraud.
Specifically, the trial court found that the foundation repair company sold its systems to
the homeowner representing that they would stabilize her house from further movement
when in reality it did not have the knowledge or understanding to design an effective
solution for the house and “simply did not really care” whether the systems would be
effective in any way. The trial court further found that the company fraudulently
misrepresented whether an engineer would be involved in the process and whether it
would obtain a permit for the work. The home had been condemned by the time of trial,
and the trial court awarded the homeowner $187,000 for the loss of the value of the
structure. Based on the reckless and fraudulent conduct of the foundation repair
company, the trial court also awarded $15,000 in punitive damages to the homeowner.
The foundation repair company appeals. We affirm as modified.

 Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed
                                    as Modified

CARMA DENNIS MCGEE, J., delivered the opinion of the court, in which RICHARD H.
DINKINS, J., and J. STEVEN STAFFORD, P.J., W.S., joined.

Kevin C. Baltz and C.E. Hunter Brush, Nashville, Tennessee, for the appellant, Olshan
Foundation Repair and Waterproofing Company of Nashville, LP.

Jean Dyer Harrison, Nashville, Tennessee, for the appellee, Rachel Maddox.
                                               OPINION

                               I.   FACTS & PROCEDURAL HISTORY

       Rachel Reeves (now Maddox) purchased a home in West Nashville on January 31,
2003. The purchase price of the home was $170,000. The two-acre lot where the house
was situated was very steep, with a steep driveway leading up to the home. The lot
continued to slope steeply upward behind the home toward an adjacent property at the top
of the hill. When the home was built in the 1970s, the builders excavated into the hillside
and spread the excavated soil out in front to make a level building pad. This was typical
for that time period and for that area of Nashville, as several other homes in the area have
similar site conditions on hilly terrain.

        The home itself was a modified A-frame structure with three bedrooms and a loft.
It consisted of three stories, with the lowest level constructed like a basement except that
it was not fully underground. The lowest level had concrete block foundation walls and a
slab floor, and one side of it was used as a two-car garage. The upper stories were wood
framed and sided. These levels had “two-story glass” along the front of the house with a
view of the valley below. The home also had large decks on the front and back of the
house.1

       The home was in good condition when Ms. Maddox purchased it, with no visible
defects noted by either Ms. Maddox or her home inspector. In late 2004, however, Ms.
Maddox started noticing some problems with the home. During heavy rains, water
“bubbled up under the foundation” at the front of the house. In addition, Ms. Maddox
noticed some “hairline cracking” in the garage side of the lowest level and some even
finer cracking in the other side of the basement. Ms. Maddox was not overly concerned
and attributed the cracking to settlement.

        In early 2005, the cracks in the basement level appeared a little larger, up to a
quarter of an inch in width, and cracks began to appear in the blocks of the brick wall.
Ms. Maddox also began to sense, for the first time, that her home was “tilting” downhill.
If a tennis ball was placed on the floor, it would roll toward the front of the house. Ms.
Maddox decided to find someone with foundational expertise to inspect the property in
order to determine if the issues were normal settlement or something more.

       Ms. Maddox had seen a television commercial for Olshan Foundation Repair and
Waterproofing Company advertising a lifetime warranty, so she contacted Olshan in May
2005. Olshan sent Kevin Hayman to Ms. Maddox’s property. Olshan’s documents
described Mr. Hayman as a “certified structural technician.” Ms. Maddox toured the
property with Mr. Hayman and showed him the tilting in the front room of the house, the

       1
           At trial, Ms. Maddox described the construction of her home as being “like a chalet.”
                                                   -2-
cracks in the basement floor, the stair-stepping cracks in the basement walls, and the area
where she had observed bubbling around the front of the foundation when it rained. Mr.
Hayman also pointed out that the back wall of the home was “bowing” inward. Mr.
Hayman assured Ms. Maddox that Olshan employees had advanced training and handled
these types of issues all the time.

       Mr. Hayman described three systems recommended by Olshan to stabilize the
house. First, Olshan would use its Cable Lock system to support the front part of the
home’s foundation with pillars. Olshan’s brochure provided the following explanation of
its Cable Lock system:

       The installation process involves individual sections of concrete being
       driven to depths of up to 90 feet beneath your foundation and locked
       together by the cable. The cable makes the difference. When the last piling
       is installed and the cap is set in place directly under the footing, you know
       your home is secure. No other foundation repair method can do this. The
       cable makes the Cable Lock™ System superior to all pressed piling
       systems and is 3 ½ times more reliable than concrete piers. The lifetime
       transferable warranty that comes with the Cable Lock™ method of repair is
       even better than our convenient, reliable and superior system. That lifetime
       warranty means something when it is backed by over 70 years of
       experience.

The brochure stated that the Cable Lock system would be custom fitted for each home,
and the “[e]ngineered” Cable Lock system rotated 360 degrees every four feet. It stated,
“City inspectors, engineers and you personally can verify job performance.” The
brochure further provided, “Every Cable Lock installation lasts a lifetime – it’s backed by
a lifetime transferable warranty from Olshan. Areas repaired with Cable Lock™ are
covered against future settlement – forever.”

        The second system recommended by Mr. Hayman was called the Wall Lock
system. Mr. Hayman explained to Ms. Maddox that this system would essentially
stabilize the house by taking pressure off the back wall that was bowing inward and
returning it to its original position. He explained that Olshan would drill through the
back wall and place anchors “in the earth” behind the house to secure the wall. The
Olshan brochure further explained that the Wall Lock system was a form of “tie back”
system in which tie backs were installed at an angle reaching from the interior of the wall
into “virgin soil” outside the wall. The brochure stated that the Wall Lock system would
be “proven and tested when installed” and also “backed by a lifetime warranty from a
company with over 70 years of experience.”

      Finally, Mr. Hayman recommended Olshan’s Water Lock system to address the
home’s water issues, prevent water from coming into the house, and help stabilize the
                                        -3-
home. The brochure explained that Olshan employees would break through the concrete
and dig down to the footer, drill weep holes, and install Water Lock pipe, before
replacing all concrete and leveling the floor. The brochure stated that the Water Lock
system was “designed to stop water from entering permanently,” and “[t]he Water
Lock™ lifetime warranty ensures you will be protected… forever.” It stated, “Olshan
proudly stands behind each and every repair just as we have been doing for the last seven
decades.”

        Ms. Maddox believed that Mr. Hayman was going to consult with an engineer to
ensure that these recommendations were appropriate. Mr. Hayman returned to the home
at a later date with an Olshan manager and a computer-generated drawing of the home
depicting the locations where the three systems would be installed. A circular stamp or
seal appeared on the drawing with the words, “Kevin Hayman, Certified Structural
Technician.” Mr. Hayman and the manager discussed their proposal with Ms. Maddox
and assured her that these systems would fix the home’s structural issues. Ms. Maddox
contracted with Olshan for the installation of all three systems at her home at a total cost
of $27,000. She signed a written contract on August 29, 2005. The contract stated that
Olshan would furnish a “BEC engineering letter” after the work was completed. It also
stated, “Work permitted to meet local government requirements.”

        Olshan installed the systems at Ms. Maddox’s home over the course of three days
in October 2005. Olshan did not install as many pilings as it originally proposed because
the steel supporting the front deck started to bend, so Ms. Maddox was only required to
pay $23,700 of the original contract price of $27,000. In March 2006, Kevin Hayman
provided Ms. Maddox with the “BEC engineering letter” mentioned in the contract, and
he also gave Ms. Maddox certificates reflecting specific terms for the lifetime warranties
on the systems. The certificate for the Cable Lock Lifetime Foundation Warranty stated
that if any “adjustments” were required during the life of the home due to settling, Olshan
would re-raise or adjust all areas previously underpinned without cost to the owner. The
certificate for the Wall Lock system stated that if any adjustments were required during
the life of the home, Olshan would “re-tighten all areas previously repaired” without cost
to the owner. The certificate for the Water Lock system stated that if any water from the
wall or the wall floor joint passed through the perimeter water control system and onto
the basement floor, Olshan would “provide the additional labor and materials to fix the
leak at no additional cost to the owner.”

       The BEC engineering letter Mr. Hayman provided to Ms. Maddox stated:

       March 7, 2006

       Olshan Foundation Repair
       19 Cleveland Ave.
       Nashville, TN. 37210
                                           -4-
      Subject:      Review of Foundation Repairs at 530 Hickory Trail Dr.,
                    Nashville, TN. 37209

      BEC Engineering, Inc. (BEC) has reviewed the subject foundation repairs
      that were made to the above referenced residence. Olshan Foundation
      Repair and Waterproofing presented the repaired portion of the foundation
      using 13 segmental pre-cast Cable Lock™ concrete piles, 6 wall lock soil
      anchors (Manta Rays) and 42 linear feet of interior water lock, and an
      automatic sump pump at the above referenced location for BEC’s review.
      The repairs were found to be in general compliance with industry standards,
      and in accordance with Olshan Foundation Repair’s proposal.

      In BEC’s opinion, the repairs as reported are adequate for this type of
      structure and for the area where the work is being performed. The repair
      work performed to the subject location is believed to have been acceptably
      completed in accordance with good industry practice for this type or repair.

      The future performance of the foundation system on the subject location
      should be as intended. Repairs to concrete and masonry surfaces should be
      made as soon as possible to help prevent moisture and insect intrusion.
      Soils should be graded such that there is positive drainage away from the
      foundation to prevent water from ponding around the foundation system.

      BEC appreciates being of service. If you have any questions or require
      additional information please contact the undersigned.


      Regards,

      Adrian Farr, P.E.
      BEC Engineering, LP

Mr. Farr attached to his letter the computer-generated drawing originally prepared by
Kevin Hayman. Along with the original circular stamp or seal stating, “Kevin Hayman –
Certified Structural Technician,” this drawing had an additional seal that stated, “Adrian
L. Farr – Registered Engineer – State of Tennessee.” A handwritten notation beside his
seal stated, “Recommendations are based on limited visual survey.” Thus, Ms. Maddox
believed that the engineer had reviewed the repairs to her home, found them appropriate
from an engineering standpoint, and concluded that the home was secure.

       Olshan returned to Ms. Maddox’s home later in 2006 and adjusted the foundation
pilings and the wall anchors. This first visit was initiated by Olshan. During the visit,
                                          -5-
Olshan’s employee informed Ms. Maddox that he needed to make some adjustments to
the systems. Ms. Maddox could “feel the tilting” and saw that some of the cracks were
slowly progressing. She had also observed water bubbling up underneath the slab when
it rained. However, the 2006 adjustment fixed the tilt in the home at least temporarily.

        In 2007, Ms. Maddox called Olshan to return to the home. Olshan adjusted the
pilings and the wall anchors again. Once again, the adjustments fixed the tilt in the home
for the time being. Ms. Maddox refinanced her home in 2008 and made several upgrades
to the interior.

       In May 2010, Nashville experienced an historic flood. Ms. Maddox’s home was
not flooded due to the steep slope of her property, but she observed a surge of water
coming from underneath the house. After the flood, she also noticed a significant tilt in
her home. She called Olshan again, on May 18, 2010, to report the problem. Olshan sent
a representative to the home in June 2010 who tightened the wall anchors and adjusted
several pilings.

       In November 2010, Ms. Maddox called Olshan again because she noticed new
cracks and believed that the tilt in the house was “becoming increasingly more dramatic.”
Ms. Maddox was in and out of the hospital during this time and did not physically
observe anyone adjusting the systems, but Olshan assured Ms. Maddox that it would send
out a representative and that “it would be fine.” Ms. Maddox called Olshan again in
December 2010 because the cracks had progressed from moderate to more significant,
and she again detected the tilting. She reported that she could “see daylight” through the
cracks. Olshan sent someone to the property in January 2011.

       An Olshan work record indicates that its employees returned to the home again in
March 2011 to adjust the pilings. The record states, “Opened pilings 2 and 3 but the
footer is cracked and it seems to be walking away from the rest of the house.” The record
states that the homeowner was not present but that the worker notified the Olshan
manager. However, no one ever informed Ms. Maddox about the cracked footer.2 She
continued to make improvements to the home throughout this time period.

       Ms. Maddox called Olshan again in August 2011. In response, an Olshan
representative returned to the home to perform some sealing and caulking. On or around
August 22, an Olshan employee was present at the property and told Ms. Maddox,
“Cannot fix. Call office.” The representative spoke “very broken English” and could not
answer Ms. Maddox’s questions. After this conversation, Ms. Maddox made repeated

       2
          At trial, Ms. Maddox testified that no one from Olshan ever told her that her house had a
cracked footer, as reflected by Olshan’s work record from March 2011. She said, “No one ever told me
anything about what was happening with my home other than they were going to adjust it and fix it.” Ms.
Maddox learned about the notation of the cracked footer during discovery in this litigation.
                                                 -6-
attempts to contact Olshan, but she was unsuccessful, and no one from the office would
return her calls.

       By late 2011, Ms. Maddox became very concerned and contacted an engineer,
Larry McClanahan, to inspect the home. According to Ms. Maddox, Mr. McClanahan
told her that the foundation work performed by Olshan actually made the issues at the
house worse. He informed her that the Olshan system was not working as intended and
would never have worked. Mr. McClanahan informed Ms. Maddox that there was an
immediate need to stabilize the structure before proceeding with a more thorough
investigation of the conditions. He made some sort of recommendation for proceeding,
but it was going to cost over $30,000, and Ms. Maddox was unable to afford the
additional cost.

       Ms. Maddox consulted with other engineers to seek a second opinion and
determine whether the cost suggested by Mr. McClanahan was truly necessary. Ms.
Maddox also continued to call Olshan repeatedly but to no avail. Ms. Maddox also had
family members call on her behalf, but Olshan representatives would not return her calls.
Ms. Maddox estimated that she called Olshan twenty to thirty times.

       On May 3, 2012, roughly eight months after the Olshan employee told Ms.
Maddox that he could not fix the house and left the property for the last time, Ms.
Maddox filed this lawsuit against Olshan in the chancery court of Davidson County. Her
complaint recounted the facts regarding Olshan’s installation of the three systems at her
home and alleged that the problems she had experienced since that time rendered the
home “barely habitable” and “potentially unlivable.” She alleged that the cracks in the
foundation had expanded to over an inch wide and that the home was in danger of further
structural failure that would in fact render the home uninhabitable. Ms. Maddox
contended that Olshan knowingly or recklessly sold her products that were “neither
needed nor effective” and ultimately caused additional harm to the home. She alleged
that Olshan’s systems could not perform as guaranteed and included a warranty that was
essentially worthless and provided no protection at all. Ms. Maddox alleged that Olshan
represented that it was uniquely skilled and had the best technology available to fix the
home, fraudulently inducing her to purchase systems that were not needed and could not
work. Ms. Maddox asserted claims for breach of warranty and common law fraud. She
estimated that it would cost over $100,000 to repair the home and sought damages in an
amount equal to the cost to repair plus all costs and expenses associated with ascertaining
those damages.       She also sought an award of punitive damages due to the
misrepresentation and intentional conduct.

       While the case was pending, in April 2013, Ms. Maddox was inside her home
during a rainstorm and heard loud cracking sounds coming from outside. Ms. Maddox
went outside and saw that a tree had split and was about to fall on her home. She
immediately left the home in her pajamas with only her purse and her dog. The tree
                                         -7-
eventually fell and brought another tree down with it, and both trees struck the home.
Ms. Maddox never resided in the home again after this date.

       Ms. Maddox talked to several engineers regarding repairs, but she was told that
there was nothing that could be done at that point because she had “missed that window.”
She tried unsuccessfully to get contractors to work on the house. Pictures of the property
taken around this time indicate that the walls were bowing and the wall anchors installed
by Olshan had turned sideways or at an angle due to the pressure. At least one crack in
the basement wall was wide enough that one could see “daylight” and look out into the
yard from the interior of the home. Stair-stepping cracks extended through the whole
corner of the front left side of the house. The soil had eroded around the foundation to
the point that the base of the foundation was clearly visible in some areas, and the sewer
line passing under the footing was also clearly visible. At the bottom of the steel post
supporting the overhanging deck, there was an obvious gap where the concrete had
“settled out from under the post” and was no longer supporting it. In the living area
upstairs, cracks extended from the tops of the doorframes, and the drywall had begun to
separate. The chimney line above the fireplace was no longer straight and indicated a
visible shift.

       According to the chief building inspector for Metro Codes in Nashville and
Davidson County, who visited the home around this time, there were cracks in the walls
and foundation, the doors were twisted “out of plumb,” the garage door on the side of the
home was no longer straight, and the home appeared to be “sliding off of the hill” on
which it was built. In his opinion, the home was unsafe for habitation and probably
would have qualified for demolition at that point. However, he did not officially post the
house as unsafe because homeowners are usually given some initial opportunity to decide
whether to pursue repairs, and he spoke with an engineer retained by Ms. Maddox who
indicated that she was investigating the possibility of repairs.

       Ms. Maddox had to pay “high-risk movers” to recover what little they could from
the home. She sought to recover under her home insurance policy, but she was only paid
around $16,000 for damage to the roof and gutters, and she was not compensated with
respect to the condition of the structure itself. Ms. Maddox amended her complaint to
allege facts regarding the further deterioration of the home, to add a fraud claim against
BEC Engineering, LP, and to add additional allegations of fraudulent conduct on the part
of Olshan. She alleged that Olshan fraudulently misrepresented that the work had been
reviewed and approved by an engineer when in fact no engineer ever viewed her home.
Ms. Maddox alleged that the BEC engineer who provided the letter regarding her
property lived in Texas and never visited the site. She alleged that if Olshan had actually
retained an engineer to inspect her property, Olshan would have learned that the home
was in grave danger and needed very specific repairs due to unstable soils on the
property. Ms. Maddox alleged that Olshan’s products could not work on unstable soil
and that this fact would have been readily apparent to any expert in the field who
                                            -8-
examined the home. She claimed that Olshan’s actions caused additional harm by
leading her to believe that the home had been stabilized, when in fact the Olshan systems
had no such effect, preventing her from performing the necessary repairs before the home
was irredeemably damaged. Ms. Maddox claimed that her home had become
uninhabitable and “a total loss” that could not be repaired “in any commercially feasible
manner.” She sought compensatory damages for the value of the home in addition to
consequential and incidental damages. Thereafter, in February 2016, the city codes
department posted a sign on the property officially designating it as “unsafe due to
foundation failure and unstable soil.”

       The trial court entered a default judgment against BEC Engineering and reserved
the issue of damages for trial. However, the trial court ultimately concluded that BEC
Engineering was not so connected to the events at issue that it was responsible for Ms.
Maddox’s damages. As a result, the claims against BEC Engineering were dismissed.
This ruling is not challenged on appeal.

       The trial court held a three-day bench trial in August 2017 on the claims against
Olshan for fraud and breach of warranty. The trial court heard testimony from Ms.
Maddox; Byron Hall, Chief Building Inspector for Metro Codes in Nashville and
Davidson County; Richard Courtney, a real estate broker; Jerry Michael Vines, Jr.,
structural engineer and expert witness for Ms. Maddox; Susan Bryan, a partner in Olshan
of Nashville; and Keith Michael Garman, geotechnical engineer and expert witness for
Olshan.

        Ms. Maddox described the condition of her home at the time of trial as “very sad”
and “a disaster.” She explained that she cannot legally enter the home, and she had been
advised that the home could slide down the hill at any minute. The doors are bowed to
the point that the home cannot be locked. She believed that the home was worth nothing
in its current condition. Ms. Maddox explained that there was nothing she could do with
the property because she had tried unsuccessfully to sell it, and she was not permitted to
rent it or build on the property.

        Ms. Maddox had originally purchased the home for $170,000 in 2003. She
refinanced in 2008 to pay for “upgrades” to the home, and at the time of trial, she still
owed $170,219 on the home. She continued to pay $1900 per month for her mortgage
payment even though she had not lived in the home in six years. Ms. Maddox introduced
the property tax records for the home reflecting its appraised and assessed value for every
year since 2005, when Olshan worked on the home. According to these tax records, in
2005, the total appraised value of the property was $162,300, with a land value of
$35,000 and an improvement value of $127,300. The total appraised value had risen to
$203,700 in 2009. However, it substantially decreased in 2011 and later years, and the
total appraised value for 2017 was only $13,400, with $11,400 of that amount being
attributable to the land, and only $2,000 being attributed to the structure.
                                            -9-
        Ms. Maddox testified about the sales price of several comparable homes on her
street and in her neighborhood in the past few years. She calculated the average price per
square foot for these sales. Using this figure, she estimated that when the trees fell on her
home in 2013, the home would have been worth about $230,000, conservatively, if it had
been in good condition. After that date, and through the time of trial, Ms. Maddox
believed that her home had zero value. She had believed that her home was “fixable”
before that date, but after that date, she did not, based on what she was told by several
engineers about the possibility of repairs.

       Ms. Maddox had met twice with Byron Hall, the Chief Building Inspector for
Metro Codes in Nashville and Davidson County. Mr. Hall also testified at trial. He had
visited Ms. Maddox’s home four or five times, beginning in 2013 after the trees fell and
most recently during the week before trial. As a result of his last visit, Mr. Hall turned
the property over to the Property Standards Division of the Codes Department to be
inspected and recommended for demolition. He explained that a property qualifies for
demolition if the cost of repairs would exceed fifty percent of the amount the property
would be worth in a repaired state. He noted that the property tax assessor valued this
structure at only $2,000 and had obviously “written it off.” He also noted that the 2013
value of the structure, according to the tax assessor, was $37,700, and it would not have
been possible to repair the home for $18,500 even at that point.

       Mr. Hall testified that the home now has cracks in all of the basement walls, with
the widest spanning approximately two inches or more. At the front corner of the house,
the concrete was exposed and cracked and appeared to be sinking or sliding to the low
side. The ground was washing away from the footing, leaving a space beneath it wide
enough for someone to reach his or her arm under the footing. The bottom of the footing
was supposed to be at least twelve inches below finished grade. Mr. Hall deemed the
home an imminent threat to public health and safety.

       Mr. Hall explained that Ms. Maddox’s lot has a slope of approximately 33 to 35
percent, which is difficult for building because of drainage issues and the condition of the
ground itself. Such steep lots are deemed “critical lots” by the codes department, and
new construction on such lots is typically overseen by the stormwater division. Mr. Hall
acknowledged that he had never inspected the systems installed by Olshan, but, he added,
that was “[p]art of the problem we had[.]” Mr. Hall explained that the city requires
permits for that type of work, and Olshan had never pulled any permits or asked for
inspections. He said, “If you’re dealing with a foundation of a piece of property, there’s
a permit required. We require a permit to do no more than dig – to excavate soil back
and put waterproofing on the basement. . . . So . . . anytime that the work is done to the
foundation of a home, it requires a permit.” The language of the relevant city ordinance
required a permit for anyone desiring to “construct, alter, repair, enlarge, move or
demolish any building or structure or part thereof[.]”
                                            - 10 -
       On cross-examination, Mr. Hall acknowledged that city ordinances provide an
exception for “normal maintenance repairs.” The relevant ordinance provided:

      16.28.030 - Normal maintenance repair—Permits not required.
      ....
      Normal maintenance repairs shall be defined as repairs to an existing
      building or structure, including but not limited to exterior and interior
      painting, papering, glazing of windows and doors, floor finishing, minor
      repairs to chimneys, stairs, porches, underpinning and repairs to an existing
      roof not to exceed thirty-three percent of the roof area.

However, Mr. Hall insisted that the type of work done in this case, involving “jacking up
the structure,” jackhammering concrete to install a drain, and installing wall anchors, was
not “[n]ormal maintenance repair” or even underpinning.               Mr. Hall described
underpinning as something used on modular buildings or trailers. He said this was his
interpretation of the ordinance and that of the department’s director, and an appeal would
have to be taken to the board of appeals in order to overturn it. He also said that the
department was in the process of having the word “underpinning” removed from the
definition because many foundation companies were doing work without permits and
claiming that their work was exempted by that term. He explained that contractors were
expected to comply with the code but that this provided “a way around a permit for some
of the contractors.” On occasions when the codes department learned that foundation
companies were proceeding without permits, they required the companies to obtain them
or issued a stop work order.

       Mr. Hall testified that if the codes department had been involved with the repairs
to the Maddox property, it would have required not only a permit for this work, but also
the involvement of an engineer, due to the conditions at the property. He also said that
the department would have required the engineer to be on-site to perform the review.

       Ms. Maddox also presented the testimony of Richard Courtney as an expert in real
estate. Mr. Courtney had been a real estate broker for 39 years and sold about 1500
homes, mainly in the Nashville area. He visited Ms. Maddox’s property at least twice,
including once on the morning of his testimony. However, he had not been inside the
house because it had been condemned and was posted with a sign. He opined that if the
house had been “in perfect condition,” it would have been valued at around $152 per
square foot. Mr. Courtney testified that two homes on Ms. Maddox’s street were sold in
the current calendar year, one for $152 per square foot and another for $132 per square
foot. Based on the square footage of Ms. Maddox’s home, he estimated that her home
would be worth $234,000 to $254,000 if in good condition. In its current state,
considering the extent of necessary repairs, Mr. Courtney believed that the home had no
value. He also explained that new construction on the lot would be cost prohibitive
                                          - 11 -
because a builder could not purchase the property and build another house on it and make
any profit.

       Ms. Maddox presented additional expert testimony from Jerry Michael Vines, Jr.,
a structural engineer. (The trial court would later describe Mr. Vines as “a credible and
very knowledgeable witness.”) Mr. Vines had been a registered professional engineer for
nearly twenty years, and he was licensed in four states. He had worked with foundation
companies on homes with unusual or difficult conditions like those present at the
Maddox property.

       Mr. Vines had visited Ms. Maddox’s home at least twice. He found it obvious that
the house had settled along the front end and that the earth pressure on the back side of
the house was pushing on the foundation walls, causing bowing and cracking. He said
the pressure had continued to the point that horizontal cracks formed and extended the
length of the rear basement wall, the garage doors were leaning, and the tops of the walls
were leaning out farther than the bases of the walls. The interior support columns were
leaning three inches toward the front of the home, indicating significant foundation
settlement and lateral pressure on the house.

        Mr. Vines had examined the locations where the three systems were installed by
Olshan. He testified that the Wall Lock anchors had continued to move since installation.
Mr. Vines coordinated with a contractor and laborers for excavation of one of the anchors
to determine how it was installed. Once the anchor system was exposed, he discovered
that it only extended approximately six feet into the soil beyond the wall, and the pivoting
anchor head that was designed to pivot and anchor into the soil was not even engaged. It
was still flat and parallel with the rod. Mr. Vines explained that with the anchor head
unengaged, there was no way for the anchor to provide any significant resistance.

        According to Mr. Vines, earth anchor systems are not “generic” or “one-size-fits-
all” systems, and they should be engineered from the very beginning. He said you have
to make sure you extend the anchors beyond any existing soil movement to reach into
stable ground in order to provide resistance and sufficient tensile force to brace the wall.
He explained that certain angles are required depending on specific soil conditions at the
site, and an engineer is needed to calculate how deep the anchor should extend. When
installing wall anchors, he said, you can’t just “drill the hole and go for it.” Rather, you
need specific information on numerous variables, including soil conditions, the height of
the wall, the height of the soil behind the wall, the pressure on the wall, etc., to utilize
formulas and determine how deep the anchor needs to be. Anchoring the system into
loose or moving soil will just pull the earth along with the wall, he said.

       Mr. Vines explained that if someone installs earth anchors by simply pushing “to a
point of refusal,” then “it’s bound to fail because it’s just not gonna work.” Mr. Vines
had reviewed the entire file produced by Olshan and the BEC engineering letter, and he
                                           - 12 -
found no indication that anyone performed any type of calculations related to the work.
Although the BEC engineering letter was provided after all repairs were done, it provided
no evidence of any type of analysis or design of the system prior to installation. Mr.
Vines was critical of the BEC engineering letter due to the lack of any indication that the
engineer performed calculations or testing, saw the repairs, or was really involved at all.
He believed there is no significance to or use for such letters.

        According to Mr. Vines, the earth anchors installed by Olshan barely reached the
edge of what he would consider stable soil, so even if the anchor head had been properly
engaged, it would only have been anchored into a small area of soil that could resist any
pull. He opined that the six-foot Olshan anchor was not nearly long enough to
sufficiently engage stable soil and provide adequate resistance. According to Mr. Vines,
they should have been installed twelve to twenty feet beyond the wall. He said that when
you don’t extend a sufficient length and achieve the required resistance, “these things are
useless.”

        Additionally, Mr. Vines saw no benefit to a warranty pursuant to which wall
anchors would be continually adjusted and tightened. He explained that if the anchor had
been properly installed in the first place, there would never be a reason to come back and
tighten it. If it was properly embedded in stable soil, it would not become loose and
move in that manner. Mr. Vines added, “it’s almost like they’re planning on this thing
being not deep enough to really be providing the right kind of tension[.]” He also
explained that if an anchor does fail and no longer have tension, tightening a bolt is not
going to help anything; instead, the anchor would have to be replaced and properly
installed.

        In summary, Mr. Vines opined that a wall anchor system could have potentially
worked for Ms. Maddox’s home, and if the system had been properly designed and
installed to an appropriate length to achieve the necessary resistance, the wall would not
have moved. However, he believed that Olshan had “taken what appears to be a one-
size-fits-all solution and applied it to this house,” and without doing any calculations to
determine the proper length, “there’s no way that this system would’ve solved anything at
this site.” He believed the Wall Lock system installed by Olshan “was destined to fail.”

      Next, Mr. Vines discussed the Water Lock system installed by Olshan. He said,
“I’m not seeing how that system installed at this home is benefitting anything.” Mr.
Vines explained that Olshan installed an interior drain system that did nothing to relieve
the water pressure applied to the outside of the foundation wall. Moreover, according to
Mr. Vines, the Water Lock system would not have any impact whatsoever on the water
coming out from the front of the house under the footer.

      Finally, Mr. Vines discussed the Cable Lock pilings installed along the front
foundation wall. Again, the Olshan brochure stated, “The installation process involves
                                       - 13 -
individual sections of concrete being driven to depths of up to 90 feet beneath your
foundation and locked together by the cable.” Mr. Vines opined that Olshan should have
required a minimum depth for installation of the pilings in order to ensure that the load
was transmitted to a deeper soil strata. The Olshan work log indicated that the pilings
were installed to an average depth of only two to three feet. Mr. Vines explained that this
was still in the upper soil strata, and if the pilings were installed at that shallow of a
depth, it should only have been because they encountered bedrock. He found no
indication from the Olshan logs that they encountered bedrock. The logs simply
indicated the distances of two to three feet. In sum, Mr. Vines opined that Olshan should
have required a minimum depth in the absence of encountering bedrock.

       Mr. Vines observed that the home had continued to settle despite the installation of
the Cable Lock pilings and adjustments to them. Mr. Vines testified that in his
experience working with foundation companies, only about three percent of pilings
experience movement over their lifetime and require adjustments. He believed that all of
the damage along the front of the house was settling as that term was used in the Olshan
warranty.

       Based on the information Mr. Vines had reviewed, he believed that when Olshan
was hired in 2005, a design certainly could have been engineered to help stabilize the
home. Mr. Vines testified that if Olshan had properly designed the anchor system and
extended it to provide sufficient resistance, the historic Nashville flood in 2010 would not
have caused any movement in the structure. However, because the system was not
significantly embedded in stable soil, that event exacerbated the existing issues at the
home.3 In summary, Mr. Vines believed that the home had continued to progressively
worsen and move over the past twelve years “as a result of the failure of this system.”
Mr. Vines testified that “if the system had been properly installed and designed, it
should’ve been able to hold” the structure in place without any ongoing continuing
damage. He believed it would be very difficult to stabilize the home at the time of trial.

       The only representative of Olshan to testify at trial was Susan Bryan. She and her
brothers were partners in a limited partnership she called Olshan of Nashville, and she
served as its managing member. This entity was formed in 2000. A separate entity,
Olshan Foundation Repair Company of Houston, was the company referenced in the
brochure with over 70 years of experience. Ms. Bryan testified that Olshan of Nashville
was licensed to use the Olshan trademark and pays another company, owned by her
parents, for use of the Olshan name.


        3
          Although Ms. Maddox sometimes referred to the 2013 date when the trees fell as a “slide,” Mr.
Vines testified that he found no evidence of escarpment in the soil to indicate an abrupt soil slope failure
within her yard. However, he did discover some evidence of escarpment on the adjacent property uphill,
indicating some type of global soil failure.
                                                  - 14 -
       Ms. Bryan lived in Houston and was not responsible for the day-to-day operation
of the Nashville entity. She had an undergraduate degree in economics but no
engineering training. Ms. Bryan had been working in the foundation repair industry
fulltime since 1998, doing sales and marketing at first, then serving as general manager of
a separate foundation company. Ms. Bryan had worked with a visual designer and a
printer to design the Olshan brochure, and she was responsible for writing its content.

       Until this litigation arose, Ms. Bryan was not involved with the Maddox property.
She had reviewed the Olshan file on the Maddox property and first visited the home in
2016. Ms. Bryan was asked about the Olshan documents listing Kevin Hayman’s title of
“Certified Structural Technician.” Ms. Bryan testified that she was involved in designing
the circular designation of the stamp or seal listing that title. She explained that Olshan
gives employees that title after they complete a three-week training course and then take
a test provided by BEC Engineering.4 She said that BEC Engineering “certified” Mr.
Hayman, and the entire program takes about three weeks from the time the employee is
hired. The employee spends one week in the field with crews observing installations, one
week riding with other technicians and preparing repair plans, and one week with
managers looking at jobs. Ms. Bryan denied that the circular stamp or seal was intended
to suggest some legal significance or professional discipline.

       Ms. Bryan conceded that the engineer who provided the letter to Olshan from BEC
Engineering did not travel to Tennessee to view the property. In addition, she
acknowledged that the Olshan file did not reflect any conversations or communications
between the Nashville office and Mr. Farr in Texas. Ms. Bryan said Olshan’s “standard
procedure” was simply to send its work log and drawing to the engineering firm for
review. Olshan’s file contained logs regarding the depths of pilings and wall anchors and
various pressures, but it did not contain any photographs of the property.

       As previously noted, the contract between Olshan and Ms. Maddox stated, “Work
permitted to meet local government requirements.” However, Ms. Bryan suggested that a
permit was not necessary for this type of work. She interpreted the aforementioned
provision of the contract to mean that Olshan would pull a permit if it was required.

       Ms. Bryan described Olshan’s standard practices with regard to the three systems
at issue. She acknowledged that none of the systems Olshan installed at the Maddox
property were intended to fix a problem with water around a footer. She said, “A footer
drain is a very different repair.” Ms. Bryan explained that the Olshan Water Lock system
was not for exterior drainage, and she did not believe that Kevin Hayman would have

       4
          Ms. Bryan’s father had for some time been part owner of BEC Engineering, and Olshan of
Nashville had served as registered agent in Tennessee for BEC Engineering. Ms. Bryan and her brothers
also owned the building where BEC Engineering operated in Texas, and BEC Engineering leased space
from them.
                                               - 15 -
told Ms. Maddox that this system would have fixed all of her water problems with her
foundation.

       Regarding the Wall Lock system, Ms. Bryan confirmed that Olshan employees
drove in the wall anchors without performing any calculations. She explained that the
rod “is driven into the ground until it won’t go any further, at an angle, and then pulled
back.” She testified:

        Q.     [I]f I’m understanding you correctly, there are no calculations done
        on the project; it’s you go until you can’t?
        A.     You drive it until it won’t go any further, yes, ma’am.

She testified that Olshan provided a Wall Lock warranty to retighten the areas if any
adjustments were required. She explained that “if the anchor becomes loose, we can
retighten it.”

       Olshan presented expert testimony from Keith Michael Garman, a geotechnical
engineer. Mr. Garman had been licensed as an engineer in Tennessee and Florida since
1991. He explained that a geotechnical engineer deals with structural foundations and
how they bear on earth materials. Mr. Garman visited the Maddox property in 2013 after
the two trees fell on the house.5 He also reviewed the Olshan file and the report from Mr.
Vines.

       Mr. Garman believed that the work Olshan performed “had value in stabilizing
[the] home” and “was an appropriate repair for the conditions at that time.” However,
Mr. Garman had reviewed Olshan’s logs regarding installation of the pilings for the
Cable Lock system, and he acknowledged that all of them were “very shallow,” at either
two or three feet deep. He believed that such distances would most likely indicate the
presence of very shallow bedrock. Mr. Garman conceded that during his 2013 site visit,
he observed that one or more pilings at the front left corner of the house “had not
performed properly.” He observed some shifting and rotation indicating that they had not
been set properly and needed replacing or additional work beyond just an adjustment.

        Mr. Garman agreed that it was important for earth anchors to reach undisturbed
soil, yet he believed that the wall anchors installed by Olshan could be placed without the
assistance of an engineer. He testified that the construction of this house was not unusual
and actually very typical for the time period, making this “a pretty standard installation.”
From Olshan’s notes, Mr. Garman discerned that the wall anchors extended “a decent

        5
           Mr. Garman testified that anytime a house is constructed on a steep slope, concerns arise about
potential landslide hazards. However, he saw nothing to suggest any landslide-type movement during his
visit to the property in 2013. He saw no leaning trees or fence lines and no scarps or drop-offs. Mr.
Garman believed that a wind event probably caused the trees to lean, not sliding soils.
                                                 - 16 -
distance.” However, one was driven to only 4 feet 9 inches, which Mr. Garman said was
“a little concerning as to why it went such a short distance[.]” Still, he suggested that the
workers may have hit rock or debris. Mr. Garman believed that “pullback” tests
performed by Olshan could determine the strength of the anchors when installed.
However, he believed that the 2010 flood was a significant factor in the anchors coming
loose. As of the date of his visit to the site in 2013, Mr. Garman believed that the wall
anchors needed to be reinstalled because they had been weakened, and once they lost
their hold, they were not likely to get it back.

        Mr. Garman believed that the 2010 Nashville flood “could’ve had a significant
impact” on the home based on the statement in the 2006 BEC engineering letter that
“[s]oils should be graded such that there is positive drainage away from the foundation to
prevent water from ponding around the foundation system.” (Mr. Garman did not believe
it was necessary for the BEC engineer to visit the site to state the conclusions in his
letter.) He did not know whether such language was “boilerplate in foundation contracts”
but considered grading “an important factor in the stability of any home.” He explained
that if the ground sloped downward toward the rear foundation wall, it could create a
valley between the back wall and the slope so that the house essentially acts as a dam,
causing water to pool and infiltrate into the ground. Mr. Garman stated that improper
grading can lead to saturated soil, which would significantly weaken the strength of the
soil and cause the anchors to lose their strength. He also testified that uncontrolled runoff
would put the rear wall in danger of further settlement. According to Mr. Garman, “if
you have uncontrolled runoff that saturates the soils in an area that hasn’t been stabilized,
or in an area where you have soil anchors, you’re asking for additional problems.” He
acknowledged, however, that Olshan took no steps to address any water issues coming
from uphill aside from the single sentence in the BEC letter months after the work was
complete. Mr. Garman agreed that it would have been reasonable for Olshan to
recommend grading before it installed its systems. He also said that grading alone would
not have fixed the problems.

       The trial court entered a fifteen-page written order, which incorporated an
additional fifty-one-page transcript, on February 21, 2018. As previously noted, the trial
court found Mr. Vines very knowledgeable and fully credited his testimony. On the other
hand, the trial court found “Mr. Garman’s expert opinion that the three systems were
effective was greatly undercut by the need for soil knowledge and the need for
waterproofing that both experts noted.”

       Regarding the claim for breach of warranty, the trial court found that “[t]he
lifetime warranty was for adjustments to be made to the devices for the life of the
house[,] which is not much of a lifetime warranty.” For reasons that will be discussed in
greater detail below, the trial court found that Ms. Maddox’s fraud claim was not barred
by the statute of limitations or the statute of repose, as argued by Olshan. Regarding the
merits of the fraud claim, the trial court found that Ms. Maddox carried her burden of
                                             - 17 -
showing that Olshan made reckless and fraudulent misrepresentations that caused her
damages. Specifically, the trial court found that Olshan lacked the knowledge to design
an effective solution for Ms. Maddox’s house, and it made reckless and material
misrepresentations about the permit, the engineer, and the effectiveness of its systems.
The court found that by the time Ms. Maddox realized that Olshan had made fraudulent
statements to her, it was too late to save her house, and repairs were no longer possible
given the extent of the damage. The court found that Ms. Maddox had sufficiently
proven “the loss of value” of her home. After discussing the property tax values, the
testimony of the real estate broker, and the testimony of Ms. Maddox, the trial court
concluded that the property would have had a fair market value of $240,000 if it was in
good condition. Next, the trial court found that “[t]he difference between the current
value and the value the property would have had if the water solutions had worked is
$187,000.” The trial court also found that Olshan’s conduct was egregious enough to
warrant an award of $15,000 in punitive damages. After the resolution of a post-trial
motion, Olshan timely filed a notice of appeal.

                                II.   ISSUES PRESENTED

      Olshan presents the following issues, as we perceive them, for review on appeal:

1.    Whether the trial court erred in finding that the statute of repose provided in
      Tennessee Code Annotated section 28-3-202 did not apply to the services
      performed by Olshan;

2.    Whether the trial court erred in finding that the fraud claim was not time-barred by
      the three year statute of limitations because the claim did not accrue until 2011;

3.    Whether the trial court erred by finding that Olshan engaged in fraud;
      a.   Whether the trial court erred by finding that Olshan made
           misrepresentations regarding the permit;
      b.   Whether the trial court erred by finding that Olshan made
           misrepresentations regarding the involvement of an engineer; and
      c.   Whether the trial court erred by finding that Olshan misrepresented the
           effectiveness of its systems;

4.    Whether the trial court held Olshan responsible for the negligence or fraud of BEC
      Engineering;

5.    Whether the trial court erred by measuring damages at the time of trial in 2017 as
      opposed to the time of the transaction in 2005 or when the cause of action accrued
      in 2011;

6.    Whether the trial court erred in awarding punitive damages.
                                          - 18 -
In her posture as appellee, Ms. Maddox raises the following additional issues:

7.     Whether the chancery court erred by not awarding additional damages for the lost
       benefit of the bargain; and

8.     Whether the chancery court erred by not awarding Ms. Maddox all additional
       damages.

For the following reasons, we affirm the decision of the chancery court as modified and
remand for further proceedings.

                                       III.   DISCUSSION

                                  A.      Statute of Repose

       We begin with Olshan’s argument that Ms. Maddox’s claim should have been
barred by the statute of repose found in Tennessee Code Annotated section 28-3-202,
which provides:

       All actions to recover damages for any deficiency in the design, planning,
       supervision, observation of construction, or construction of an improvement
       to real property, for injury to property, real or personal, arising out of any
       such deficiency, or for injury to the person or for wrongful death arising out
       of any such deficiency, shall be brought against any person performing or
       furnishing the design, planning, supervision, observation of construction, or
       construction of such an improvement within four (4) years after substantial
       completion of such an improvement.

“In enacting the statute, the General Assembly intended to insulate contractors, architects,
engineers, and others from liability for defective construction or design of improvements
to realty where the injury happens more than four years after substantial completion of
the improvement.” Chrisman v. Hill Home Dev., Inc., 978 S.W.2d 535, 540 (Tenn.
1998). The statute “will bar an action four years after substantial completion, regardless
of when the plaintiff may have reasonably discovered the injury.” Id. at 539.

      This statute of repose applies to “claims involving the construction of some kind
of improvement.” Id. at 538 n.5; see also Harmon v. Angus R. Jessup Assocs., Inc., 619
S.W.2d 522, 523 (Tenn. 1981) (recognizing that the statute prohibits suits against those
“engaged in the construction of improvements to real property”). Accordingly, in this
context, courts have recognized “a distinction between ‘improvements to real property’
and ‘mere repairs or replacement.’” Coffman v. Armstrong Int’l, Inc., No. E2017-00062-
COA-R3-CV, 2019 WL 3287067, at *6 (Tenn. Ct. App. July 22, 2019). Determining
                                          - 19 -
whether the work constituted “construction of an improvement to real property” is an
issue of law, which we review de novo. Memphis Light, Gas & Water Div. v. T.L. James
& Co. Inc., No. 52, 1986 WL 11588, at *4 (Tenn. Ct. App. Oct. 17, 1986). This phrase is
not defined in the statute, so we must give the words their usual and ordinary meaning.
Id. at *3. Looking to the definition from Black’s Law Dictionary, Tennessee courts have
defined an “improvement” for purposes of this statute of repose as:

       [A] valuable addition made to property (usually real estate) or an
       amelioration in its condition, amounting to more than mere repairs or
       replacement, costing labor or capital, and intended to enhance its value,
       beauty or utility or to adapt it for new or further purposes.

Id.

        Some examples are helpful. In Cartwright v. Presley, No. E2005-02418-COA-
R3-CV, 2007 WL 161042, at *1-2 (Tenn. Ct. App. Jan. 23, 2007), we considered whether
the addition of a 3,000-pound walk-in cooler at a florist would constitute the construction
of an improvement to real property. The plaintiffs argued that the cooler was only an
appliance or trade fixture and not an improvement to real property. Id. at *3. Our
research revealed “two widely-employed analytical approaches used in determining
whether a particular act of construction constitutes an improvement to real property.” Id.
(citing 63B Am.Jur.2d Products Liability § 1631 (1997); 2 Bruner & O’Connor
Construction Law § 7:174.53). One approach focused on a common law fixture analysis,
and the other was a “common sense approach” looking to the usual definition of the word
improvement. Id. Under the “common sense approach,” the focus was on “whether the
addition or betterment to the property increases the property’s value, involves the
expenditure of labor or money, and is designed to make the property more useful or
valuable as distinguished from ordinary repairs.” Id. (citing 41 Am.Jur.2d Improvements
§ 1 (1995)). We did not find it appropriate to adopt one approach to the exclusion of the
other but said that either one or both may serve as a useful analytical tool when
classifying the nature of work on real property, depending on the facts of each case. Id.
at *4. Considering these approaches and other cases on this issue, we concluded that the
assembly and installation of the walk-in cooler was a valuable addition and
“improvement” to the real property. Id. at *5. Notably, we found no evidence suggesting
that the installation of the cooler was a mere repair or replacement. Id.

       More recently, this Court considered whether the daily removal and installation of
insulation at an industrial facility over the course of many years would constitute the
construction of an improvement to real property. See Coffman, 2019 WL 3287067, at *7.
We recognized that the initial installation of insulation in a building may be considered
construction of an improvement to real property if it is intended to be a permanent
feature, but we nevertheless held that the daily removal and installation of insulation over
the course of many years was a mere repair or replacement, and not the “construction of
                                           - 20 -
an improvement to real property” within the meaning of the statute. Id.

        In the case before us, the trial court found that the damages asserted did not arise
out of the construction of “an improvement to real property” within the meaning of the
statute. On appeal, Olshan argues that the services it provided at the Maddox property
“fall squarely within the types of services that were intended to be addressed by the
statute of repose.” Olshan claims that it was retained to “ameliorate the deteriorating
condition” of the property and increase its value because the home experienced cracking,
water intrusion, and tilting.6

       In our view, however, Olshan’s argument only confirms that the services it
provided were repairs and not the construction of an improvement to real property. Ms.
Maddox contacted Olshan because she was experiencing problems at the home. She
needed Olshan to correct or otherwise address bowing walls, cracks in the foundation and
walls, and water intrusion. Although these actions, like most repairs, might ultimately
improve or better the condition of the property, they were nonetheless repairs to the
property, not improvements in the ordinary sense of the word. They were not “intended
to enhance its value, beauty or utility or to adapt it for new or further purposes.”
Memphis Light, Gas & Water Div., 1986 WL 11588, at *4. At trial, Ms. Bryan herself
described Olshan as “a remedial repair contractor.” The remedial repair work Olshan
performed at the home does not fall within the usual and ordinary meaning of “the
construction of an improvement to real property.” As a result, we affirm the trial court’s
conclusion that the four-year statute of repose in Tennessee Code Annotated section 28-
3-202 did not bar this action.7

                                     B.    Statute of Limitations

        Next, Olshan argues that the trial court erred in finding that Ms. Maddox’s fraud
claim was not barred by the three-year statute of limitations. Ms. Maddox filed suit on
May 3, 2012. Applying the discovery rule, the trial court found that her cause of action
for fraud accrued in August 2011. On appeal, Olshan agrees that the three-year statute of
limitations applies and that the discovery rule is applicable to fraud claims. However,
Olshan argues that “any claim of fraud related to [its] work accrued in 2006 when [Ms.

        6
           “To ‘ameliorate’ something means to ‘make [it] better.’” Cartwright, 2007 WL 161042, at *5
(quoting Black’s Law Dictionary 80 (7th ed. 1999)).
         7
           This statute of repose contains a “fraud exception” found at Tennessee Code Annotated section
28-3-205. Chrisman, 978 S.W.2d at 541. It prevents application of the statute of repose if the defendant
was “guilty of fraud in performing or furnishing the design, planning, supervision, observation of
construction, construction of, or land surveying, in connection with such an improvement” or if the
defendant “wrongfully conceal[ed] any such cause of action.” Tenn. Code Ann. § 28-3-205(b). The trial
court did not reach the applicability of this exception because it found the statute of repose inapplicable.
We agree with the trial court’s analysis and do not reach the alternative arguments presented by the
parties regarding the fraud exception.
                                                  - 21 -
Maddox] was placed on inquiry notice of her potential fraud claim.” Olshan argues that
Ms. Maddox was aware in 2006 that the home was not stabilized the way she expected it
would be because Olshan made the first adjustment at that time, and she sensed the tilting
and noticed additional cracks.8 Olshan argues that Ms. Maddox could not delay filing
suit until all the consequences of the alleged wrong were actually known.

        The discovery rule was adopted as an “equitable exception” to the statute of
limitations due to the unfairness of requiring a plaintiff to sue to vindicate a non-existent
wrong at a time when the injury was unknown and unknowable. Individual Healthcare
Specialists, Inc. v. BlueCross BlueShield of Tenn., Inc., 566 S.W.3d 671, 710 (Tenn.
2019). “Under the discovery rule, the statute of limitations will only begin to run when
the plaintiff has actual knowledge of the claim, or when the plaintiff has actual
knowledge of facts sufficient to put a reasonable person on notice that she has suffered an
injury as a result of wrongful conduct.” Coffey v. Coffey, No. E2017-00988-COA-R3-
CV, 2018 WL 4519988, at *7 (Tenn. Ct. App. Sept. 20, 2018) perm. app. denied (Tenn.
Feb. 20, 2019). The discovery rule is not intended to allow a plaintiff to delay filing suit
until he or she discovers all the facts affecting the merits of his or her claim. Redwing v.
Catholic Bishop for Diocese of Memphis, 363 S.W.3d 436, 459 (Tenn. 2012). Thus, the
limitations period begins to run when the plaintiff “gains information sufficient to alert a
reasonable person of the need to investigate the injury.” Id. (quotation omitted).

      “‘The issue of accrual of a cause of action is basically a question of fact,’”
meaning that this Court will review the trial court’s determination de novo with a
presumption of correctness and will not overturn the trial court’s decision unless the
evidence preponderates against it. Langford v. Clark, No. M2011-01910-COA-R3-CV,
2012 WL 3608662, at *5 (Tenn. Ct. App. Aug. 22, 2012) (quoting Johnson v. Craycraft,
914 S.W.2d 506, 511-12 (Tenn. Ct. App. 1995)). More particularly, for purposes of the
discovery rule, “whether a plaintiff exercised reasonable care and diligence in
discovering her injury is usually a fact question for the trier of fact to determine.” Coffey,
2018 WL 4519988, at *7 (citing Wyatt v. A-Best, Co., 910 S.W.2d 851, 854 (Tenn.
1995)).

       In reaching its decision in this case, the trial court discussed the terms of the
lifetime warranty and noted that Olshan made such adjustments to its systems in 2006,
2007, 2010, and 2011. The trial court found that Olshan advised Ms. Maddox that
nothing else could be done in August 2011. The trial court found that Ms. Maddox did
not know that the house was not fixable until this point, and, the trial court added, “[t]his
was reasonable.” The trial court noted that Ms. Maddox was not a sophisticated party
and that she had continued to invest money in her home throughout this time period. The

        8
          Notably, Olshan insists that the fraud claim accrued in 2006, and it does not argue that Olshan’s
return visits to the home after the flood in 2010 put Ms. Maddox on notice of her injury, as these events
occurred within three years of the filing of the complaint in 2012.
                                                  - 22 -
trial court found that the engineering letter provided by Olshan caused Ms. Maddox to
have confidence in the Olshan systems as the solution to her problems, and it was not
until August 2011 that she realized that Olshan would not return and would not otherwise
provide a permanent solution for the house. The court found that Ms. Maddox did not
have a reason to believe that Olshan would not continue to help her or would not honor
its lifetime warranty until August 2011.

        The evidence supports the trial court’s conclusions. In 2006, Olshan made an
adjustment to the systems on one occasion on its own initiative. Ms. Maddox had
admittedly sensed the tilting and observed some progression in the cracks. However, the
adjustment fixed the tilt in the home for the time being. The warranties provided by
Olshan conveyed to the purchaser that further adjustments might be necessary in the
event of future settlement. The certificate for the Cable Lock Lifetime Foundation
Warranty stated that if any “adjustments” were required during the life of the home “due
to settling,” Olshan would re-raise or adjust all areas previously “underpinned” without
cost to the owner. Consequently, we cannot say that the events occurring in 2006 were
sufficient to put a reasonable person on notice that she had suffered an injury as a result
of Olshan’s wrongful conduct, and we reject Olshan’s argument that the fraud claim
accrued in 2006.

                                       C.     Fraud

       The next issue raised by Olshan is whether the trial court erred in finding that it
engaged in fraud. Because “‘fraud assumes many shapes, disguises and subterfuges,’”
any effort to precisely define fraudulent conduct would be futile. Hodge v. Craig, 382
S.W.3d 325, 342 (Tenn. 2012) (quoting Waller v. Hodges, 321 S.W.2d 265, 271 (Tenn.
Ct. App. 1958)). According to our supreme court,

              The ancient common-law action for deceit provided the vehicle for
       persons to seek recovery from those who intend to deceive others for their
       own benefit. W. Page Keeton, Prosser and Keeton on the Law of Torts §
       105, at 727-28 (5th ed.1984) (“Prosser & Keeton”). The basis for finding
       legal responsibility for deceit centered on the defendant’s intent to deceive,
       mislead, or convey a false impression. Prosser & Keeton, § 107, at 741.

              Throughout the centuries, the courts have had little difficulty finding
       the required intent to deceive when the evidence shows either that the
       defendant knows the statement is false or that the defendant made the
       statement “without any belief as to its truth, or with reckless disregard
       whether it be true or false.” Prosser & Keeton, § 107, at 741-42. . . . .

Id.

                                            - 23 -
       To recover for fraud (also known as fraudulent or intentional misrepresentation):

       a plaintiff must prove: (1) that the defendant made a representation of a
       present or past fact; (2) that the representation was false when it was made;
       (3) that the representation involved a material fact; (4) that the defendant
       either knew that the representation was false or did not believe it to be true
       or that the defendant made the representation recklessly without knowing
       whether it was true or false; (5) that the plaintiff did not know that the
       representation was false when made and was justified in relying on the truth
       of the representation; and (6) that the plaintiff sustained damages as a result
       of the representation.

Hodge, 382 S.W.3d at 343.

       “Fraud claims are inherently fact-intensive[.]” Vic Davis Constr., Inc. v. Lauren
Engineers & Constructors, Inc., No. E2017-00844-COA-R3-CV, 2019 WL 1300935, at
*6 (Tenn. Ct. App. Mar. 20, 2019). “Whether a defendant had the present intent to
defraud another is a question of fact.” Ray v. Williams, No. W2000-03000-COA-R3-CV,
2002 WL 974671, at *3 (Tenn. Ct. App. May 9, 2002) (citing Keith v. Murfreesboro
Livestock Mkt., Inc., 780 S.W.2d 751, 754 (Tenn. Ct. App. 1989)). Likewise, “the
truthfulness or falsity of a statement is a question of fact[.]” Morrison v. Allen, 338
S.W.3d 417, 428 (Tenn. 2011). As previously noted, in this case, the trial court found
that Olshan made reckless and material misrepresentations “about the permit, the
engineer and [the] effectiveness of Olshan’s systems.” On appeal, Olshan challenges
these findings but on a rather limited basis. Olshan does not analyze all of the
aforementioned elements of a fraud claim. Instead, it argues that it “did not make any
false misrepresentations” regarding the three subjects mentioned by the trial court. We
address each argument in turn.

                                     1.   The Permit

        Olshan’s written contract with Ms. Maddox stated, “Work permitted to meet local
government requirements.” The trial court found that Olshan did not in fact apply for a
permit because it did not believe that permits are required for foundation repairs. The
trial court’s order discusses the testimony of Mr. Hall, who explained that city ordinances
do require a permit for the type of repairs Olshan performed. During her oral ruling, the
trial judge explained that even though the definition of “normal maintenance repairs” did
use the term “underpinning,” it only excepted “minor repairs to . . . underpinning[.]”
Thus, the trial court concluded that a permit was required, Olshan failed to obtain one,
and Olshan “had no intention of getting one contrary to the contract term about permits
which were misleading.”

       Olshan argues on appeal that “the Trial Court erred in holding that a building
                                       - 24 -
permit was required for Olshan’s services.” Olshan claims that the trial court
impermissibly deferred to the code interpretation espoused by Mr. Hall and should have
conducted an independent review of the code sections. Olshan maintains that its work
would fall within the exception for “normal maintenance repairs” because it used the
term underpinning. “At the very least,” Olshan argues, “the lack of clarity on whether a
permit was required shows that Olshan did not act with the requisite intent to establish
fraud as it relates to its failure to obtain a permit.”

       This argument misses the point. Olshan’s contract unequivocally stated, “Work
permitted to meet local government requirements.” This conveys the message that
Olshan had obtained a permit in order “to meet” local government requirements. Simply
put, the contract did not say or suggest that no permit was required or that Olshan would
apply for a permit if one was required. Regardless of whether city ordinances required a
permit, Olshan represented to Ms. Maddox that the work was “permitted to meet local
government requirements.” This was not true, and Olshan knew it. The evidence
supports the trial court’s finding that Olshan failed to obtain a permit and “had no
intention of getting one contrary to the contract term about permits[.]” We reject
Olshan’s argument that its statement was not false or that it did not make the statement
with the requisite intent.

                                   2.   The Engineer

       Next, Olshan argues that it did not misrepresent the involvement of the engineer,
and without a misrepresentation, the fraud claim must fail. Olshan points to the
contractual language stating that it would “furnish BEC engineering letter after work is
completed.” Olshan notes that “the BEC Letter was, in fact, provided after the work was
complete.” Olshan contends that Ms. Maddox knew from the contract that the engineer
would be involved on the back-end of the project. As such, Olshan argues that there was
no misrepresentation.

       The trial court did not view Olshan’s conduct so narrowly. The trial court found
that Kevin Hayman told Ms. Maddox that an engineer would be involved with the
solution. It also found that Ms. Maddox paid over $23,000 for the three systems
believing that they had been engineered and would work for her home. Olshan’s
brochure described the “[e]ngineered Cable Lock” system, stating that “[c]ity inspectors,
engineers, and you personally can verify job performance.” The contract stated that
Olshan would furnish Ms. Maddox with a BEC engineering letter once the work was
complete, and Olshan gave the letter to her in March 2006. The letter stated that the
engineer had “reviewed the subject foundation repairs that were made to the above
referenced residence.” It said that Olshan “presented the repaired portion of the
foundation . . . at the above referenced location for BEC’s review,” and the “repairs were
found to be in general compliance with industry standards[.]” The attached drawing with
the engineer’s seal had a handwritten notation beside it stating, “Recommendations are
                                            - 25 -
based on limited visual survey.”

         The trial court found that the engineer did not visit the house or see the actual
work that was done, nor did he perform calculations. The court “credit[ed] the low
opinion Mr. Hall ha[d] of the BEC Engineering letter.” The trial court found that the
letter was fraudulent and misleading because it expressly stated that a limited visual
survey was performed when in fact it was not. The court found that “Olshan was well
aware the engineer it used was never present on the property.” The trial court found that
“[t]he engineer’s statement was not truthful, and it misled [Ms. Maddox] into believing
that the systems and the installation were engineered professionally.” It found that the
letter caused Ms. Maddox to have confidence in the Olshan systems as the solution to her
problems, and it was not until August 2011 that she realized that they would not provide
a permanent solution for the house. In summary, the trial court found that “the BEC
letter . . . was designed to conceal from [Ms. Maddox] that the installation of the systems
was not engineered, as was required for the systems to be effective.”

       We discern no error in these findings and agree with the trial court’s conclusion
that Olshan made material and fraudulent misrepresentations about the involvement of
the engineer. There is no merit to Olshan’s argument that it made no misrepresentations.

                      C.    The Effectiveness of Olshan’s Systems

       Finally, we consider the trial court’s finding that Olshan made reckless
misrepresentations regarding the effectiveness of its systems. The trial court found that
Mr. Hayman explained to Ms. Maddox that the three Olshan systems would work
together to stabilize her house from further movement. The trial court noted that
Olshan’s documents reflected Mr. Hayman’s name with “a seal-like image” describing
him as a certified structural technician, when in reality, he was “certified” after a three-
week class at BEC Engineering. The trial court recited many of the statements provided
in the Olshan brochure (and quoted at length earlier in this opinion). For example, the
brochure stated that the advantage of its Wall Lock anchor system was that it “[r]eaches
virgin soil.” The trial court found that the type of lifetime warranties provided by Olshan
also gave context to the claim for fraudulent misrepresentation.

       The trial court credited the opinion of Mr. Vines that the wall anchors installed by
Olshan “were not effective and provide[d] no benefit” because they did not penetrate into
good soil where the anchors could hold. The court found that Olshan performed no
engineering soil studies, and without knowledge of the soil, the anchors simply could not
be placed effectively. The court also found that the Water Lock system “does nothing to
relieve the water pressure on the outside of the house” and provided no benefit to the
property given its problems. Because Olshan did not solve the water problem coming
from the slope behind the property, the court found, “the house was destined to continue
to move, and the Olshan solution was destined to fail.” The trial court found that Olshan
                                           - 26 -
used “a one-size-fits-all solution,” and “the systems were not a solution for this
property.”

       The trial court found that Ms. Maddox had no expertise in building or water
problems, and her belief that a Tennessee engineer was involved made her rely even
more on Olshan’s expertise. The court concluded that the engineering letter Olshan
provided “was designed to conceal from [Ms. Maddox] that the installation of the
systems was not engineered, as was required for the systems to be effective.” Ultimately,
the court concluded that “Olshan does not have an understanding and knowledge to
design an effective solution for [Ms. Maddox’s] house.” It found that if Olshan had not
concealed the true condition of the property, Ms. Maddox would not have bought the
Olshan systems and would have instead waterproofed her house as the experts at trial
agreed was necessary. The trial court found that Olshan’s misrepresentations about the
effectiveness of its systems were material, and Ms. Maddox had every reason to rely on
them.

       Again, Olshan’s argument on appeal with respect to this issue is rather limited.
Olshan insists that the record “does not establish that Olshan had any knowledge that its
proposed repair plan would be ineffective” for the Maddox property. According to
Olshan, Ms. Maddox had the burden of proving that when Olshan proposed the repair
plan, “Olshan knew that it would not effectively remedy the problems at the Property.”
(emphasis added) As factual support for this argument, Olshan notes that Ms. Maddox’s
expert, Mr. Vines, testified that an earth anchor system could have been used to stabilize
the home if it had been designed and installed correctly. As a result, Olshan argues that it
recommended an appropriate repair plan even if it ultimately proved to be unsuccessful.
Olshan argues that the trial court essentially converted a negligence claim into a claim for
fraud.

       Even though Olshan insists that it did not have knowledge that its systems would
be ineffective, a fraud claim may be established if “the defendant either knew that the
representation was false or did not believe it to be true or [] the defendant made the
representation recklessly without knowing whether it was true or false[.]” Hodge, 382
S.W.3d at 343 (emphasis added). Here, the trial court found that Olshan engaged in
“reckless misrepresentations.” During her oral ruling, the trial judge stated,

              The plaintiff also states that Olshan sold her a solution which did not
       work, and that Olshan made representations to her about the quality of the
       solution and the effectiveness of the solution that Olshan knew it did not
       know, that is, it made statements that this will solve the problem, and
       Olshan did not know, did not have the expertise, and in fact, did not as a
       matter of fact know whether the systems would be effective in any way or
       be completely ineffective. And, basically, Olshan, in selling the systems to
       the plaintiff, simply did not really care. And that really is the definition of -
                                             - 27 -
       or meets the definition of fraudulent misrepresentation because recklessness
       is defined as when statements are made as fact when the speaker does not
       know whether they are true or not.
               ....
               So I have found that the elements of fraudulent misrepresentation,
       that is, in this case, reckless misrepresentation have been met.

The record supports the trial court’s conclusion that Olshan and Mr. Hayman made its
representations regarding the effectiveness of the Olshan systems recklessly without
knowing whether the statements were true or false. This was not an instance of Olshan
making an appropriate proposal but simply installing it negligently. The evidence
supports the trial court’s finding that Olshan “[did] not have an understanding and
knowledge to design an effective solution for [Ms. Maddox’s] house.”

                                   D.   BEC Engineering

       Olshan’s next issue is whether the trial court erred “by holding Olshan responsible
for the negligence and/or fraud of BEC.” The trial court entered a default judgment
against BEC Engineering after it failed to appear or defend, and the court reserved the
issue of damages. After trial, however, the trial court dismissed the claims against BEC
Engineering, finding that it was not so connected to the events at issue that it was
responsible for Ms. Maddox’s damages.

       On appeal, Olshan complains that the trial court’s order focused in large part on
the conduct of BEC Engineering. Olshan argues that the trial court’s criticism of BEC
should have had “no bearing” on the claims against Olshan. Olshan contends that it had
no control over BEC Engineering or the content of the BEC Engineering letter, and it
argues that the trial court essentially attributed the negligence or fraud of BEC
Engineering to Olshan.

        Olshan cites no legal authority for its argument on appeal, and we find no support
for its assertion that the trial court impermissibly “attributed” the negligence or fraud of
BEC to Olshan. The trial court specifically found that Ms. Maddox did not show that
BEC Engineering was an alias for Olshan. At the same time, however, the trial court
found that “BEC was a significant part of the service that Olshan provided to [Ms.
Maddox].” We agree with this conclusion. Olshan was the entity that contracted with
Ms. Maddox and agreed to provide her with the engineering letter. Even if Olshan did
not initially control what the engineer wrote in the letter, Olshan is the entity that
provided that information to Ms. Maddox, knowing that it contained false information
and knowing that she would rely on it. This issue is meritless.

                              E.    Compensatory Damages

                                           - 28 -
       Olshan’s next issue is “[w]hether the Trial Court erred by measuring damages at
the time of trial in 2017 as opposed to at the time of the transaction in 2005 or even at the
time of the injury in 2011.” Although arguably not encompassed by this issue, as framed,
Olshan raises a host of arguments regarding the damage award.

       First, Olshan argues that its conduct was not the cause of the complete demise of
Ms. Maddox’s home. Olshan contends that the loss of Ms. Maddox’s home was caused
by catastrophic events -- the historic Nashville flood in 2010 and the storm of April 2013,
when the trees fell. However, this argument ignores the testimony of Mr. Vines, Ms.
Maddox’s expert, whose testimony the trial court fully credited. Mr. Vines opined that at
the point when Olshan was hired in 2005, a design certainly could have been engineered
to help stabilize the home. He testified that if Olshan had properly designed the anchor
system and adequately extended it into the soil to provide sufficient resistance, the flood
in 2010 “would not have caused any movement in the structure.” However, because the
system was not significantly embedded in stable soil, he said, that event exacerbated the
issues at the home. The following exchange occurred during his testimony:

        Q.      Mr. Vines, in 2005, if they had – if they being Olshan – had
                engineered and done the work correctly on the front end, would you
                have seen any damage, or would it have held to the best [of] your
                knowledge?
        A.      It – it should’ve performed. It should’ve held the structure in place
                and not – not seen any ongoing continuing damage. If – if the
                system had been properly installed and designed, it should’ve been
                able to hold.

Mr. Vines said that the home had continued to progressively worsen and move “as a
result of the failure of this system.” Based on this testimony, we reject the notion that the
loss of the home was caused by storms rather than Olshan.9

        Next, Olshan argues that Ms. Maddox’s own conduct contributed to her home
being susceptible to the damage incurred. Specifically, Olshan contends that Ms.
Maddox failed to take the action recommended in the BEC Engineering letter, which
stated,


9
  Olshan argues that if “two distinct, successive causes, unrelated in their operation, conjoin to produce a
given injury, one of them must be the proximate, and the other the remote, cause of the injury, and the
court, in passing on the facts as found or admitted to exist, must regard the proximate as the efficient and
the consequent cause, and disregard the remote cause.” Ward v. Univ. of S., 209 Tenn. 412, 423-24
(1962). However, in our view, the work performed by Olshan and the storms that occurred in 2010 and
2013 “cannot be said to be ‘unrelated in operation’ so as to make the [first] act merely a condition and not
a direct and proximate cause.” Kroger Co. v. Giem, 215 Tenn. 459, 471 (1964). The very purpose of
hiring Olshan was to stabilize the structure and address the water intrusion at the home.
                                                  - 29 -
       The future performance of the foundation system on the subject location
       should be as intended. Repairs to concrete and masonry surfaces should be
       made as soon as possible to help prevent moisture and insect intrusion.
       Soils should be graded such that there is positive drainage away from the
       foundation to prevent water from ponding around the foundation system.

(emphasis added). Olshan suggests that Ms. Maddox should have graded the back of the
property to prevent runoff, and her failure to do so “allowed her home to fall victim” to
the later damage.

        We disagree. At the outset, we note that the BEC letter is addressed to Olshan, not
Ms. Maddox. Olshan provided this letter to Ms. Maddox months after it installed the
three systems at her home, including the wall anchors along the back wall. Ms. Maddox
testified that when she read the final two sentences above, she thought that Olshan had
already addressed those topics. She believed that the grading issue was addressed by the
Water Lock system. She testified that “no one ever said I needed to do anything.” Ms.
Maddox suggested that it would have been very difficult if not impossible to even bring
grading equipment into the area behind her house.

        We also note that the engineer who wrote this recommendation never visited the
site, saw photographs of the property, or discussed the property with Olshan employees.
The testimony of Ms. Bryan seems to suggest that these final two sentences were almost
standard language in the engineering letters. She said that Olshan pours concrete to cover
the access holes it creates, but it does not repair floors or siding, so the first sentence says
that those repairs will need to be made. She clarified that this was a cosmetic issue and
would not impact the effectiveness of Olshan’s systems. When asked about the second
sentence regarding grading, Ms. Bryan said that homeowner maintenance and water
management are generally considered to be the responsibility of the homeowner rather
than Olshan. She suggested that the second sentence might have been intended to ensure
that water coming off rooflines, gutters, or downspouts did not flow in and around the
foundation.

       No one from Olshan ever mentioned grading or even discussed the soil with Ms.
Maddox, and Olshan did not condition the effectiveness of its systems on Ms. Maddox
hiring someone else to do grading at the property after it installed its systems. We cannot
say that this single sentence in the engineering letter is a basis for denying relief to Ms.
Maddox in this case.

       Olshan next argues that Ms. Maddox failed to mitigate her damages. Olshan
points to the fact that engineer Larry McClanahan advised Ms. Maddox in late 2011 that
there was an immediate need to stabilize her home. Because Ms. Maddox failed to do so,
Olshan argues that she failed to mitigate her damages, and she is not entitled to any
recovery.
                                          - 30 -
       One who is injured by the wrongful conduct of another, whether by tort or breach
of contract, must exercise reasonable care and diligence to avoid loss or minimize
damages. Memphis Light, Gas & Water Div. v. Starkey, 244 S.W.3d 344, 353 (Tenn. Ct.
App. 2007). “‘With respect to the burden of proof in such cases, the general rule is that
the defendant has the onus of establishing matters asserted by him in mitigation or
reduction of the amount of plaintiff’s damages.’” Hailey v. Cunningham, 654 S.W.2d
392, 396 (Tenn. 1983) (quoting Int’l Correspondence School, Inc. v. Crabtree, 34 S.W.2d
447, 449 (Tenn. 1931)). “The applicable standard is one of reasonable care. The plaintiff
is not required to mitigate his damages if such action is unduly burdensome or
impossible.” Haynes v. Cumberland Builders, Inc., 546 S.W.2d 228, 234 (Tenn. Ct. App.
1976). The injured party is not required to exert “extraordinary efforts.” Carolyn B.
Beasley Cotton Co. v. Ralph, 59 S.W.3d 110, 115 (Tenn. Ct. App. 2000). “The key factor
in determining whether a plaintiff has fulfilled his or her duty to mitigate ‘is whether the
method he [or she] employed to avoid consequential injury was reasonable under the
circumstances existing at the time.’” Kirby v. Memphis Light Gas & Water, No. W2017-
02390-COA-R3-CV, 2019 WL 1895862, at *4 (Tenn. Ct. App. Apr. 29, 2019) (quoting
Kline v. Benefiel, No. W1999-00918-COA-R3-CV, 2001 WL 25750, at *7 (Tenn. Ct.
App. Jan. 9, 2001)).

        An examination of the circumstances surrounding Mr. McClanahan’s
recommendation leads us to conclude that Ms. Maddox acted reasonably. During
Olshan’s last visit to the home in August 2011, its employee told Ms. Maddox, “Cannot
fix. Call office.” Ms. Maddox tried repeatedly to contact Olshan, but her calls were not
returned. By late 2011, she became very concerned and consulted an engineer, Mr.
McClanahan. He provided her with a letter stating that there was an immediate need to
stabilize the structure before proceeding with a thorough investigation of the conditions.
From her conversations with Mr. McClanahan, Ms. Maddox understood that the home
was in critical shape, but she did not get the impression that the house was going to fall
the next day. Ms. Maddox mentioned that Mr. McClanahan proposed some sort of
recommendation for proceeding, but she said that it was going to cost her over $30,000,
and she simply could not afford the cost because she was paying for care for her ill
mother at that time and did not have the funds available. Ms. Maddox consulted with
other engineers and continued to call Olshan for help, but Olshan did not respond. She
filed suit in May 2012. These facts indicate that Ms. Maddox acted with reasonable care
by independently investigating the damage to her home, consulting with more than one
engineer, repeatedly calling Olshan for assistance, and finally, filing suit. Paying Mr.
McClanahan an additional $30,000 would have been unduly burdensome for Ms.
Maddox. She did not breach her duty to mitigate damages.

       The next issue raised by Olshan concerns the measure of damages utilized by the
trial court. Olshan argues that the trial court should have used the “benefit of the
bargain” rule applicable to fraud cases rather than the cost to repair versus diminution in
                                           - 31 -
value analysis typically employed in cases involving damage to real property.

       This Court considered the same dilemma in Flatford v. Williams, No. C.A. 1201,
1989 WL 4419, at *1 (Tenn. Ct. App. Jan. 24, 1989), a case involving fraudulent
misrepresentations about a home sold with existing fire damage. The appellants argued
that the case should be viewed as one involving injury to real estate, with the measure of
damages being either the diminution in value or the cost to repair. Id. The appellees
argued that the proper measure of damages was the one applicable to a claim for
fraudulent misrepresentation. Id. We agreed with the appellees and applied the measure
of damages for a fraud claim. Id. We relied on the Tennessee Supreme Court’s decision
in Haynes v. Cumberland Builders, Inc., 546 S.W.2d at 228, 233 (Tenn. Ct. App. 1976), a
case involving fraudulent misrepresentation in a land sales transaction, in which the
supreme court also utilized the measure of damages for a fraud claim. Id. Based on these
cases, we agree with Olshan that the trial court should have applied the measure of
damages applicable to fraud claims.

       Next, Olshan argues that the trial court was limited to using the benefit of the
bargain rule, valued at the time of the contract, as the only measure of damages for a
fraud claim. In Haynes (and Flatford), those courts explained that the proper measure of
damages was the benefit of the bargain rule. Thus, Olshan argues on appeal that the trial
court should have used that measure also. However, after Haynes was decided in 1976,
the Tennessee Supreme Court adopted the Restatement (Second) of Torts as setting forth
“the proper measure of damages for fraudulent misrepresentation.” Boling v. Tenn. State
Bank, 890 S.W.2d 32, 35 (Tenn. 1994). The Tennessee Supreme Court reaffirmed the
applicability of this measure of damages in 2012, stating:

      Adopting the Restatement (Second) of Torts § 549 (1977), this Court has
      held that the proper measure of damages for an intentional
      misrepresentation claim is:

      (1) The recipient of [an intentional] misrepresentation is entitled to recover
      as damages in an action of deceit against the maker the pecuniary loss to
      him of which the misrepresentation is a legal cause, including (a) the
      difference between the value of what he has received in [the] transaction
      and its purchase price or other value given for it; and (b) pecuniary loss
      suffered otherwise as a consequence of the recipient’s reliance upon the
      misrepresentation.
      (2) The recipient of [an intentional] misrepresentation in a business
      transaction is also entitled to recover additional damages sufficient to give
      him the benefit of his contract with the maker, if these damages are proved
      with reasonable certainty.

Hodge, 382 S.W.3d at 343 (quoting Boling, 890 S.W.2d at 35-36).
                                       - 32 -
        The Comments to this Restatement section explain that “[l]oss may result from a
recipient’s reliance upon a fraudulent misrepresentation in a business transaction in one
of several ways.” Restatement (Second) of Torts § 549 (1977) cmt. a. The most
common is when the falsity of a representation causes the article purchased to be of less
value than that which it would have had if the truth was known, and clause (1)(a) of the
Restatement provides for the recovery of general damages so resulting. Id. Recognizing
that losses may be sustained in other ways, clause (1)(b) further provides for the recovery
of special or consequential damages. Id. Both of these options for recovering pecuniary
loss are found in subsection (1). The comments further explain:

      g. Subsection (1) states the rules normally applicable to determine the
      measure of damages recoverable for a fraudulent misrepresentation in a tort
      action of deceit. If the plaintiff is content with these damages, he can
      always recover them. The rules stated in Subsection (1) are the logical rules
      for a tort action, since the purpose of a tort action is to compensate for loss
      sustained and to restore the plaintiff to his former position, and not to give
      him the benefit of any contract he has made with the defendant. When the
      plaintiff has not entered into any transaction with the defendant but has
      suffered his pecuniary loss through reliance upon the misrepresentation in
      dealing with a third person, these are the rules that must of necessity be
      applied.

      When the plaintiff has made a bargain with the defendant, however,
      situations arise in which the rules stated in Subsection (1), and particularly
      that stated in Clause (a) of that Subsection, do not afford compensation that
      is just and satisfactory. . . . .

      The frequency of these situations has led the great majority of the American
      courts to adopt a broad general rule giving the plaintiff, in an action of
      deceit, the benefit of his bargain with the defendant in all cases, and making
      that the normal measure of recovery in actions of deceit.

      The rule adopted in Subsection (2) does not take this position. One reason
      is that in occasional cases the out-of-pocket measure of damages will
      actually be more profitable and satisfactory from the point of view of the
      plaintiff than the benefit-of-the-bargain rule. . . . Another and a more
      important, reason is that there are many cases in which the value that the
      plaintiff would have received if the bargain made with him had been
      performed cannot be proved with any satisfactory degree of certainty,
      because it must necessarily turn upon the estimated value of something
      non-existent and never in fact received. In this case the benefit-of-the-
      bargain harm to the plaintiff becomes mere speculation, and ordinary rules
                                          - 33 -
        of the law of damages preclude the award.

        h. This Section therefore follows a compromise position adopted by some
        jurisdictions, giving the plaintiff the option of either the out-of-pocket or
        the benefit-of-the-bargain rule in any case in which the latter measure can
        be established by proof in accordance with the usual rules of certainty in
        damages. . . . .

Id. at cmt. g-h.

        Utilizing the measure of damages described in the Restatement, then, the trial
court could have awarded Ms. Maddox her pecuniary losses (including general and
special damages) as set forth in subsection (1), or benefit of the bargain damages under
subsection (2). See cmt. h (explaining that the plaintiff has the option of either the out-of-
pocket rule or the benefit-of-the-bargain rule). Although the trial court did not describe
its damage award as such, it essentially awarded Ms. Maddox the pecuniary loss she
suffered from the loss of her home.10 The trial court found that it was “too late to save
her house,” as it was “sliding off the hill” at the time of trial, with cracks over two inches
wide, and it had been condemned by the codes department and recommended for
demolition. In effect, the trial court awarded damages to Ms. Maddox to compensate her
for her pecuniary loss. See Black’s Law Dictionary (11th ed. 2019) (defining pecuniary
loss as “loss of money or of something having monetary value”).

        It was appropriate for the trial court to award Ms. Maddox her pecuniary loss from
the loss of her home, as the Restatement specifically provides that the plaintiff may
recover for “pecuniary loss to him of which the misrepresentation is a legal cause.”
Restatement (Second) of Torts § 549(1). A similar loss was considered in Ward v. Perna,
870 N.E.2d 94, 96-97 (Mass. App. Ct. 2007), in which tenants made substantial
improvements to a cottage based on assurances that they would be given the opportunity
to buy the underlying land. After affirming the jury’s finding of fraud, the appellate court
was tasked with determining the amount of damages pursuant to the Restatement
(Second) of Torts § 549 (1977). Id. at 101. In determining the tenants’ pecuniary loss,
the appellate court agreed with the tenants’ contention that their “actual loss [was] not
just the cost of the improvements, but the loss of the value of the entire house, as they are
now unable to move it as a result of reliance on the misrepresentation and are forced to
abandon it.” Id. at 101-102. The appellate court found that the tenants were entitled to
$120,000 in damages for the value of the home lost, based on expert testimony of “its
        10
            Although the trial court’s order discussed the diminution in value versus cost to repair measure
of damages, and made its findings in the context of that approach, its analysis of the issue of damages is
still helpful to our analysis on appeal. See, e.g., In re Heinz, No. 10-52964, 2012 WL 137563, at *12 n.3
(Bankr. E.D. Tenn. Jan. 18, 2012) (discussing the measure of damages for breach of a construction
contract and the measure of damages caused by fraudulent misrepresentation and concluding that “both
measurements lead to the same result when applied to the facts of the instant case”).
                                                  - 34 -
condition as of the time of trial.” Id. at 102 n.12.

       Returning to the present case, the remaining issue is the appropriate value of Ms.
Maddox’s pecuniary loss, as both parties raise arguments on appeal challenging the trial
court’s calculation of the damage award. Still assuming that the benefit of the bargain
rule must apply, Olshan argues that the trial court should not have determined the lost
value of Ms. Maddox’s property as of the date of trial in 2017. It argues that the trial
court should have measured Ms. Maddox’s damages as of the date of the contract in 2005
or when Ms. Maddox discovered her injury in 2011. In the event that we do not agree
with the trial court’s valuation as of 2017, Ms. Maddox argues that the loss should have
been measured as of 2011 but not 2005.

       Because the trial court was valuing Ms. Maddox’s pecuniary loss, rather than the
benefit of the bargain,11 we reject Olshan’s contention that the trial court was required to
confine its damage award to the date of the contract in 2005. At that point, the resulting
damage to the structure, and the pecuniary loss, had not yet occurred. The damage in this
case was not completed at the time of the transaction. It progressed slowly over the next
several years, as the condition of the house deteriorated. Ms. Maddox was not limited to
recovering only the pecuniary loss she had incurred at the time of the representation. See,
e.g., Hodge, 382 S.W.3d at 348 (explaining that a victim of intentional misrepresentation
regarding paternity was “entitled to recover the pecuniary loss he suffered as a result of
his justifiable reliance,” and the trial court could determine his pecuniary loss by
considering the amount of child support, medical expenses, and insurance premiums he
paid in the years thereafter). We also reject the suggestion that the calculation of
pecuniary losses must end in 2011 when Ms. Maddox learned that Olshan would not
return to fix the home. We have already concluded that Ms. Maddox did not fail to
mitigate her damages.

       The Restatement comments specifically recognize that pecuniary loss may occur
depending on the particular use to which the plaintiff puts the article. Restatement
(Second) of Torts § 549 cmt. a. For instance, loss may occur “when a buyer, in reliance
upon the misrepresentation, uses the subject matter of the sale in the belief that it is
appropriate for a use for which it is harmfully inappropriate[.]” Id. Stated differently,
“loss may result from a purchaser’s use of the article for a purpose for which it would be
appropriate if the representation were true but for which it is in fact harmfully
inappropriate.”12 Id. at cmt. d. In that situation, the resulting damage is recoverable if

        11
            See Haynes, 546 S.W.2d at 233 (explaining that for the benefit of the bargain rule, “[t]he
measure of damages and the fixing of the value of the property are to be determined as of the time of the
transaction”).
         12
            Comment d to the Restatement provides the following illustration:

        The A Automobile Company puts upon the market cars in part made by itself, in part
        consisting of parts bought elsewhere and assembled in the cars. B sells to the A
                                                 - 35 -
the misrepresentation was a legal cause of it, meaning, “of a kind that might reasonably
be expected to result from reliance upon the misrepresentation.” Id.

       Based on Olshan’s misrepresentations, Ms. Maddox relied on the subject matter of
this sale, the three Olshan systems, to stabilize her home and prevent further structural
damage, when in fact the Olshan systems were not effective for that use. This led to
further structural damage and the eventual demise of Ms. Maddox’s home, causing her
pecuniary loss. The full extent of the damage to Ms. Maddox’s home was realized in
2017 when the home was finally recommended for demolition. Ms. Maddox testified
that she is now unable to sell the property or utilize it for any purpose. Ms. Maddox
believed that the home had zero value.

        Ms. Maddox entered her property tax records for each year into evidence at trial.
According to those records, her home was appraised, for tax purposes, as high as
$203,700 for 2009 and 2010. However, it substantially decreased thereafter, and the total
assessed value for 2017 was only $13,400, with $11,400 of that amount being attributable
to the land, and only $2,000 being attributed to the structure. Ms. Maddox testified about
sales of several comparable homes on her street and in her neighborhood over the past
few years. She determined the price per square foot for these sales, then estimated that
when the trees fell on her home in 2013, the home would have been worth about
$230,000, conservatively, if it had been in good condition. She also presented the
testimony of Mr. Courtney, the real estate broker with nearly 40 years of experience. He
had visited Ms. Maddox’s property at least twice, including on the morning of his
testimony, although he had not been inside the house because it had been condemned.
He opined that if the house had been “in perfect condition,” it would have been valued at
around $152 per square foot. Two homes on the same street were sold in the current
calendar year, one for $152 per square foot and another for $132 per square foot. Using
these numbers, he estimated that the Maddox home would have been worth $234,000 to
$254,000 if in good condition. He believed that rebuilding on the lot would be cost
prohibitive.

       The trial court’s actual calculations of value are a bit confusing. First, in
discussing the property tax values, the court correctly stated that the value had risen as
high as $203,700. However, the court stated that the values decreased after that year, and
“[i]n 2017, the building value was $42,000, and the land value by the tax assessor for tax
purposes was noted at $11,400.” From our review of the record, this information is
incorrect. The 2017 value of the structure was only $2,000, not $42,000. The land value

      Company a quantity of roller bearings by misrepresenting them to be X roller bearings.
      The X bearings are standard and high class bearings. The bearings sold are in fact
      inferior and not made by the X Company. After these bearings have been assembled in a
      number of the cars their true character is discovered and the cars are sold at a lesser price
      because the bearings are not the X bearings. The A Company is entitled to recover the
      depreciation in the sales value of its cars because of the inferior bearings.
                                                 - 36 -
was $11,400, for a total value of $13,400.

       Next, the trial court determined that “the value the property would have had,” if
Olshan’s systems had worked, was $240,000. The trial court discussed the testimony of
the real estate broker and the average price per square foot for homes sales. For all of its
arguments regarding damages, Olshan does not challenge the trial court’s finding that the
home would have been valued at $240,000 if the Olshan systems had worked.
Accordingly, we will not review that finding on appeal.

        Finally, to calculate its final damage award, the trial court subtracted from the
$240,000 value a sum representing “the current value” of the property “placed by the
assessor” to reach a damage award of only $187,000. By our calculation, the trial court
subtracted $53,000 as “the current value” of the property “placed by the assessor.”
($240,000 - $53,000 = $187,000). This sum was clearly based on the court’s erroneous
recitation of the 2017 tax value. Again, the trial court’s order stated that the 2017 tax
value was $42,000 for the structure and $11,400 for the land. In reality, the tax record
showed $2,000 for the structure and $11,400 for the land, for a total value of only
$13,400. The evidence at trial does not support a finding that the property had a current
value of $53,000 at the time of trial, as placed by the assessor or otherwise.13

        On appeal, Ms. Maddox contends that any deduction for a current value was
erroneous. She argues that her loss of value as of 2017 “would be the totality of the
$230,000 value [the property] would have had if [it had] been in good condition, less the
insurance payment of $15,957.93 from the insurance company that Ms. Maddox received
for a total additional damages award of $214,042.07[.]” We agree with Ms. Maddox in
this regard. She was forced to abandon the property. She cannot sell it, rent it, build on
it, or even legally enter it. As Ms. Maddox suggests, “it was a total loss.” Olshan’s
attorney appeared to recognize this fact during closing arguments at trial, when he stated,
“Because of bad luck and, frankly, neglect, this property has no value, but that’s not
because of any intentional misrepresentation of fraud on the part of Olshan.” (emphasis
added).

       We accept the calculation Ms. Maddox proposes on appeal and conclude that the
damage award for her pecuniary loss should be modified from $187,000 to $214,042.07.
The measure of damages for pecuniary loss is intended “to compensate the injured party
for actual damages by attempting to place that party in the same position that he or she
would have been in had the fraud not occurred.” Gage v. Seaman, No. 03A01-9711-CH-
00503, 1999 WL 95185, at *6 (Tenn. Ct. App. Feb. 23, 1999); see also Zaire v. Roshan-

        13
           Inexplicably, later in the order, the trial court recited the value of the house in good condition
as $230,000 rather than $240,000, as it found initially. We can only surmise that this was a misstatement
based on the numbers from the initial calculation ($240,000 - $53,000 = $187,000). However, Ms.
Maddox utilizes the figure of $230,000 in her brief on appeal, so we will do the same.
                                                   - 37 -
Far, No. M2011-00012-COA-R3-CV, 2012 WL 1965606, at *5 (Tenn. Ct. App. May 31,
2012) (explaining that the plaintiff is entitled to recover “such damages as will
compensate for the loss or injury actually sustained in reliance on the misrepresentation
and to place the plaintiff in the same position the plaintiff would have occupied but for
the fraud or if the representation had been true”). We conclude that the compensatory
damage award of $214,042.07 proposed by Ms. Maddox serves that purpose. See Ward,
870 N.E.2d at 102 n.12 (awarding damages for the pecuniary loss of the cottage valued
based on expert testimony of “its condition as of the time of trial”).

        Ms. Maddox also requests an award of additional damages. She acknowledges
that this case “does not neatly fit into the standard benefit of the bargain analysis,” yet
she suggests that the trial court should have used some combination of the loss in value
approach and the benefit of the bargain approach in order to fully compensate her for her
losses. Specifically, she argues that she should have been awarded the value of her home
as economic loss in addition to “benefit of the bargain damages related to the contract.”
The “benefit of the bargain award” she seeks is $23,700, the price she paid Olshan to
install the systems. She explains, “The expectation of Ms. Maddox from her testimony
was that she believed the $23,700 would repair her home.” Ms. Maddox does not cite to
any location in the record to demonstrate that she requested such damages before the trial
court. From our review of the record, Ms. Maddox did not request a return of the
purchase price in her complaint, her amended complaint, during opening statements at
trial, or during closing arguments.14 As such, she cannot request such an award for the
first time on appeal. Dick Broad. Co. of Tenn. v. Oak Ridge FM, Inc., 395 S.W.3d 653,
670 (Tenn. 2013) (“Issues raised for the first time on appeal are waived.”).

       Finally, Ms. Maddox suggests that she should be awarded $98,800 for mortgage
payments she made after 2013 “for a house that she could not live in.” She suggests that
these damages “were directly incurred as the result of Olshan’s conduct.” We disagree.
Ms. Maddox owed her mortgage payment regardless of Olshan’s conduct. To award her
both the value of the home and an additional award for her mortgage payments used to
acquire that interest would amount to a double recovery.

                                      F.     Punitive Damages

       The final issue we address on appeal is Olshan’s contention that the trial court
erred in awarding punitive damages to Ms. Maddox. The trial court explained the basis

        14
           Ms. Maddox acknowledges in her brief that she “pursued this case under a theory of deceit or
intentional misrepresentation, as rescinding the contract was impossible because you can’t unring the bell
and save a destroyed house.” During closing arguments, her attorney calculated damages as follows:
“230 for the loss of value, minus the payments from the insurance company, and plus the payments she
made over the last four years for her mortgage and taxes.”
        We express no opinion as to whether Ms. Maddox would have been entitled to a return of the
purchase price if she had pursued this argument in the trial court.
                                                 - 38 -
for its award of $15,000 in punitive damages as follows:

              As to punitive damages, the Court finds that there is clear and
      convincing proof that the Plaintiff is entitled to punitive damages because
      she is not a wealthy homeowner, her home was her largest monetary
      investment and it meant a great deal to her. And when reckless contractors
      . . . convince homeowners that they can place metal spears and piers
      underneath a house, and that they know what they are doing, when an
      engineer is required to look at soil where a house has noticeable water
      problems and that was the reason why the Plaintiff needed this work in the
      first place, the Court thinks that it’s an egregious thing to do to someone, to
      place their only or their greatest monetary investment, that also has
      emotional meaning, in peril, and in this case the Plaintiff really has lost her
      house, the impact on the Plaintiff is great. The Plaintiff is not skilled in
      building or in correcting water problems. It turns out that the Defendant
      isn’t either, but the Defendant Olshan represented itself as being skilled.
      The Defendant had time to make things right, particularly early on, and
      chose not to do so. In fact, just sending someone out there to tighten things.
      And the Defendant should have known, had it paid attention, that the
      systems were having no effect whatsoever on the Plaintiff’s water
      problems. The Court understands that the Defendant Olshan profited from
      the sale, otherwise, why would they be selling these improvements which
      they tout to the public as solving water problems. The Defendant did not
      take any remedial action, and did not make any amends. The primary
      purpose of this punitive damages award of $15,000 is to deter the
      Defendant Olshan from continuing to sell improvements, that is, the three
      systems that it is using to solve serious residential problems, when, in fact,
      they are ineffective without soil tests and without waterproofing and
      without an engineer’s expertise. And the Court finds that this should not
      have happened.

On appeal, Olshan argues that “because Olshan is not liable for fraud (as detailed above),
the Trial Court erred by awarding punitive damages.” Olshan maintains that it was not
reckless. We have already rejected these arguments and concluded that Olshan did in
fact engage in fraudulent and reckless conduct. Therefore, Olshan’s challenge to the
punitive damage award is without merit.

                                   IV.   CONCLUSION

      For the aforementioned reasons, the judgment of the chancery court is affirmed as
modified. Costs of this appeal are taxed to the appellant, Olshan Foundation Repair and
Waterproofing Company of Nashville, L.P., for which execution may issue if necessary.

                                          - 39 -
         _________________________________
         CARMA DENNIS MCGEE, JUDGE




- 40 -
