                IN THE COURT OF APPEALS OF TENNESSEE            FILED
                                 EASTERN SECTION                November 3, 1997

                                                                Cecil Crowson, Jr.
                                                                Appellate C ourt Clerk




FIRST TENNESSEE BANK                      )   C/A NO. 03A01-9704-CH-00134
NATIONAL ASSOCIATION,                     )
                                          )   KNOX CHANCERY
       Plaintiff-Appellee,                )
                                          )   HON. SHARON BELL,
v.                                        )   CHANCELLOR
                                          )
C.T. RESORTS COM PANY, INC.,              )
C. GARY TRIGGS and JAMES C.               )
CHILDERS,                                 )   AFFIRMED
                                          )   AND
       Defendants-Appellants.             )   REMANDED




J. MICHAEL WINCHESTER and E. BRIAN SELLERS, LACY & WINCHESTER,
P.C., Knoxville, for Plaintiff-Appellee.


W. MORRIS KIFER, GENTRY, TIPTOE, KIFER & McLEMORE, Knoxville, for
Defendants-Appellants.




                                    OPINION




                                                        Franks, J.


              This appeal is from a summary judgment granted to plaintiff against

defendants by the Trial Judge.

              Essentially, defendants insist that the record contains evidence of

misrepresentations of the value of the property by plaintiff’s agents, which was
purchased by defendants, and that these representations are actionable under their

counter-claims.

               The dispute centers around the purchase of 16 condominiums by C.T.

Resorts (C.T.) from Valley Fidelity Bank & Trust Company (Valley Fidelity) in May

1990. Valley Fidelity acquired several units in Gatlinburg Village Condominiums

after the original developer became seriously ill and was unable to complete the

project. Valley Fidelity completed construction and foreclosed on the property in

August 1989. C. Gary Triggs and James C. Childers, principals of C.T., were

interested in purchasing condominiums in the Gatlinburg area. According to their

affidavits, they contacted Re/Max brokers in Morganton, North Carolina. and

Sevierville, Tennessee, and reviewed a packet of information provided by the

brokers. They also assert that one of the brokers stated that the Gatlinburg Village

units were worth more than $100,000.00 each.

               C.T. originally proposed to purchase the units for $1,125,000.00. After

Valley Fidelity rejected that proposal, Triggs and Childers met with Ogle Stooksbury,

a representative of Valley Fidelity, and Stooksbury showed them an appraisal prepared

by Charles Smith. Smith first appraised the property on January 27, 1988, and the

original appraisal stated values of $112,000.00 per unit for the first phase of

construction ($3,248,000.00 total) and $408,500.00 total for the second phase. Smith

reaffirmed these estimates in a second appraisal dated April 19, 1989.1 Smith had

conducted both appraisals before the original developer’s illness and Valley Fidelity’s

acquisition of the property. According to their affidavits, Stooksbury also stated that

the units were worth the $112,000.00 value reflected in the appraisals or possibly

more depending on how well they would furnish them. Stooksbury also stated that


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    Triggs’ and Childers’ earlier affidavits apparently claim that Stooksbury showed them both
   Smith appraisals. Their later affidavits, however, refer only to the second Smith appraisal.

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some work remained to be done on the units and that Valley Fidelity would be

responsible for it.

                  Stooksbury also had in his possession an appraisal prepared by Joseph

Fannin. This appraisal was dated September 18, 1989, (after Valley Fidelity acquired

the property) and valued the units at $81,500.00 to $85,000.00 subject to certain

repairs. According to Triggs’ and Childers’ affidavits, Stooksbury did not show them

this appraisal.

                  After the meeting, the parties signed a purchase agreement. As part of

the agreement, C.T. executed a promissory note to Valley Fidelity for $1, 125,000.00,

a deed of trust on the units, and various other loan documents.

                  C.T. defaulted on the note payments and plaintiff foreclosed on the

sixteen condominium units, and brought this action to recover a deficiency judgment,

interest, attorney’s fees and costs.

                  The trial court initially granted summary judgment to plaintiff, but this

Court vacated the judgment and remanded. After remand, appellants filed

supplemental affidavits and pleadings and the Chancellor granted summary judgment

on the basis that the appraisals were opinions of value, and the disclosure or

nondisclosure was not actionable, and granted judgment to plaintiff against defendants

jointly and severally, for $809,296.81.

                  To prevail on a claim of fraudulent misrepresentation, a party must

prove that: (1) the defendant made a representation of an existing or past fact; (2) the

representation was false when made; (3) the representation was in regard to a material

fact; (4) the false representation was made either knowingly or without belief in its

truth or recklessly; (5) the party reasonably relied on the misrepresented material fact;

and (6) the party suffered damage as a result of the misrepresentation. Metropolitan

Gov’t v. McKinney, 852 S.W.2d 233, 237 (Tenn. App. 1992). Since Valley Fidelity or

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its agents made no representations of existing or past facts, the appellants did not offer

material evidence of this element in the record.

              Generally, claims of value made during commercial transactions are

considered statements of opinion and do not provide a basis for a fraud claim.

Sunderhaus v. Perel & Lowenstein, 388 S.W.2d 140 (1965). The policy behind this

rule is that “value is largely a matter of judgement and estimation” about which people

may differ. 37 Am. Jur. 2d Fraud and Deceit § 113 (1968).

              Appraisals are generally considered to be a statement of an opinion.

Although no Tennessee cases directly address this issue, this Court has considered

appraisals in other contexts as estimates of value. Hiller v. Hailey, 915 S.W.2d 800

(Tenn.App. 1995). Additionally, Tennessee courts have noted that caveat emptor is

the general rule applicable to real estate transactions. Meyer v. Bryson, 891 S.W.2d

223 (Tenn.App. 1994).

              Our view that these appraisals are opinions of value is in accord with

courts in other jurisdictions who have determined that an appraisal of land is merely a

representation or an opinion of value and therefore not actionable. George v. Federal

Land Bank of Jackson, 501 So.2d 432 (Ala. 1986); Frazier v. Southwest Sav. & Loan

Ass’n, 653 P.2d 362 (Ariz. Ct. App. 1982); Block v. Lake Mortgage Co., 601 N.E.2d

449 (Ind.App. 3 Dist. 1992). The United States Supreme Court once noted that

“common experience discloses that witnesses the most competent often widely differ

as to the value of any particular lot; and there is no fixed or certain standard by which

the real value can be ascertained.” Montana Ry. Co. v. Warren, 137 U.S. 348 (1890).

              Cases which have reached the opposite conclusion have generally done

so based on facts not present in this case. The Virginia Supreme Court determined

that an appraisal of a diamond could constitute an express warranty under U.C.C. § 2-

213. Daughtrey v. Ashe, 413 S.E.2d 336 (Va. 1992). In Daughtrey, however, the

                                            4
appraisal form specifically described the diamonds as a certain quality and color,

terms that are not generally ascertainable by the average consumer who must rely on

the jeweler’s superior knowledge. Id. Moreover, the Smith appraisals are contingent

upon the occurrence of future events. To be actionable, the alleged misrepresentation

must be of an existing or past fact and not merely conjecture or speculation about

future events. Brungard v. Caprice Records, 608 S.W.2d 585 (Tenn.App. 1980). The

first appraisal states that “the value estimate conveyed in this report is made subject to

satisfactory completion of the plans and specifications submitted to the appraiser.”

Although it is unclear whether appellants actually saw the first appraisal, the second

Smith appraisal clearly referenced it.

              At the time of the second appraisal, the construction had not been

completed and the appraisal states that it is an “opinion”. Accordingly, appellants

were on notice of the contingent, speculative nature of the appraisals.

              Appellants also claim that Stooksbury’s failure to disclose the Fannin

appraisal was fraudulent. Concealment or nondisclosure of information is fraudulent

“only when there is an existing fact or condition, as distinguished from a mere

opinion, to be disclosed, and when there is a duty to disclose upon the party having

knowledge of such facts or condition.” Dozier v. Hawthorne Dev. Co., 262 S.W.2d

705, 711 (Tenn.App. 1953). Generally, there is no duty to disclose unless: (1) there is

a previous confidential relationship between the parties; (2) where it appears one or

each of the parties expressly reposes a trust or confidence in the other; (3) or where

the transaction is intrinsically fiduciary and calls for good faith. Id.

              Since an appraisal is merely a statement or opinion of value, and not a

“fact or condition,” Stooksbury was under no obligation to disclose. Moreover, none

of the usual elements creating a duty of disclosure are present here. The record shows

that this was an arms-length transaction. Accord, Simms v. Biondo, 816 F.SUPP.. 814

                                             5
(E.D.N.Y. 1993).

              Appellants also contend that Stooksbury’s statement concerning the

value of the property was fraudulent and rely on Sunderhaus v. Perel & Lowenstein,

388 S.W.2d 140 (Tenn. 1965). Sunderhaus is distinguished from this case because

Stooksbury was not, nor did he represent himself to be an expert on local real estate

values. Additionally, the jeweler in Sunderhaus made factual representations about

the diamonds, such as style, and trade-in value to lend support to his statement of

value. Appellants also cite Augur v. Smith. 18 S.W. 398 (Tenn. 1891). In Augur, the

seller of land located in Mississippi told the buyer that it was timberland worth $3.00

an acre. In reality, the land was “cutover” land worth only $.50 an acre. Id. Augur is

distinguishable because the seller’s claim of value included the factual representation

that the land was covered with timber and the land was far enough away that the buyer

relied on the seller’s misrepresentations of the existing facts.

              Appellants contend that Re/Max broker was acting as Valley Fidelity’s

agent at the time the broker made representations of value, and that Valley Fidelity’s

signing the showing agreement ratified all of the broker’s prior actions.

              The record shows that the appellants initiated contact with Re/Max

Brokers, but assuming arguendo Valley Fidelity did provide information and ratified

the broker’s prior actions, there is no basis for liability. According to appellants’

affidavits, information provided consisted of “projections” and not misrepresentations

of existing facts. Appellants also claim that the Re/M ax agent told them that the units

were worth more than $100,000.00 each. However, such is an opinion of value and

not actionable.

              We have reviewed the remaining issues and conclude they are either

without merit or are rendered moot by our decision.

              The cost of the appeal is taxed to the appellants.

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                              __________________________
                              Herschel P. Franks, J.

CONCUR:




___________________________
Don T. McMurray, J.




___________________________
William H. Inman, Sr.J.




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