                               I N THE COURT OF APPEALS

                                                                   FILED
                                                                    October 2, 1996

                                                                   Cecil Crowson, Jr.
                                                                   Appellate C ourt Clerk
RI CHARD BRI GGS a nd                           )   KNOX CI RCUI T
STEPHANI E R. BRI GGS,                          )   C. A. NO. 03A01- 9603- CV- 0011 5
                                                )
                                                )
            Pl a i nt i f f s - Appe l l a nt s )
                                                )
                                                )
                                                )
                                                )
                                                )
vs .                                            )   HON. DALE C. WORKMAN
                                                )   J UDGE
                                                )
                                                )
                                                )
                                                )
                                                )
RI VERSOUND LI M TED PARTNERSHI P, )
                   I                                REVERSED AND REMANDED
W LLI AM S. NI X d/ b/ a W
  I                              SN             )
ENTERPRI SES, GENERAL PARTNER,                  )
a n d DARYL WAGNER,                             )
                                                )
            De f e nda nt s - Appe l l e e s )




DAVI D N. GARST, Le wi s , Ki ng, Kr i e g & W l dr op, P. C. , Knoxvi l l e f o r
                                              a
a pp e l l a nt .


DAVI D E. SM TH, Hodge s , Dought y & Ca r s on, Knoxvi l l e , f or Appe l l e e .
            I




                                       O P I N I O N



                                                                          M M r a y, J .
                                                                           c ur
           The s i ngl e i s s ue i n t hi s c a s e i s whe t he r a r e mot e pur c ha s e r

o f a h o me ma y ma i nt a i n a ne gl i ge nc e a c t i on a ga i ns t t he bui l de r o f

t he h o me de s pi t e a l a c k of c ont r a c t ua l pr i vi t y.                                  The t r i a l c o u r t

g r a n t e d s umma r y j udgme nt i n f a vor of t he de f e nda nt a nd t hi s a pp e a l

r e s u l t e d.      W r e ve r s e t he j udgme nt of t he t r i a l c our t .
                       e



           The Pl a i nt i f f s ,         Dr .     a nd M s .
                                                          r            Ri c h a r d M Br i ggs ,
                                                                                     .                         pur c ha s e d a

c o n d o mi ni um f r om t he De f e nda nt s , M . a nd M s . Edwa r d S. Al be r s i n
                                                  r        r
                      1
Apr i l 1 9 93.            Da r yl W gne r Cons t r uc t i on Co. bui l t t he home i n 19 8 9 .
                                    a

Th e c o n domi ni um wa s a pa r t of a de ve l opme nt by Ri ve r s ound Li mi t e d

Pa r t n e r s hi p, W l l i a m S. Ni x d / b/ a W Ent e r pr i s e s , Ge ne r a l Pa r t ne r .
                      i                            SN

The Br i g gs ' na me d t he s e pa r t i e s a s de f e nda nt s , a l l e gi ng ne gl i ge n c e

i n t h e c ons t r uc t i on a dmi ni s t r a t i on,                       s upe r vi s i on,         i ns pe c t i on a n d

a c t ua l      c ons t r uc t i on of            t h e home .            Spe c i f i c a l l y,        t he p l a i nt i f f s

c l a i m t h a t t he i r home wa s da ma ge d due t o a l e a ky ba s e me nt , wh i c h

wa s     c a u s e d by be l ow gr a de hol e s                       i n t he ba s e me nt               wa l l s     a nd t h e

g e ne r a l f a i l ur e of t he c ont r a c t or t o i ns t a l l a de qua t e wa t e r pr oof i n g

o f t h e ba s e me nt .



           The Ci r c ui t Cour t f or Knox Count y gr a nt e d s umma r y j udgme n t t o

Ri v e r s o und Li mi t e d ,             WSN a nd Da r yl               W gne r
                                                                           a              Cons t r uc t i on,           f i nd i n g

" t ha t       t h e Pl a i nt i f f s ha ve not                 s t a t e d a c a us e of              a c t i on a ga i n s t


           1
           A s e t t l e me n t a g r e e me n t wa s r e a c h e d wi t h t h e Al b e r s , a n d a v o l u n t a r y n o n s u i t
wa s e n t e r e d a g a i n s t Do n Du n c a n , d / b / a Fr o n t i e r Ho me I n s p e c t i o n s , wh o i n s p e c t e d t h e
h o me f o r t h e Br i g g s p r i o r t o t h e i r p u r c h a s e .

                                                                  2
t he s e de f e nd a n t s b e c a us e t he Cour t                  f i nds t he y owe d no dut y t o a

r e mo t e pur c ha s e r of a bui l di ng t he y c ons t r uc t e d t o e xe r c i s e d u e

car e     in     t he       c ons t r uc t i on       to    pr e ve nt      s ubs e que nt     da ma ge        to   or

d e t e r i o r a t i on of s a i d pr ope r t y. "



         The Br i ggs '           a ppe a l    a nd pr e s e nt       t h e f ol l owi ng i s s ue f or o u r

c o n s i d e r a t i on:



                  W t he r a n owne r of a r e s i de nc e who l a c ks pr i vi t y
                    he
         wi t h t he bui l de r t he r e of ma y ma i nt a i n a n a c t i on a ga i ns t
         t he bui l de r f or ne gl i ge nc e i n t he c ons t r uc t i on of t he
         r e s i de nc e .



         Be c a us e t he t r i a l c our t ba s e d i t s de c i s i on on a que s t i on o f

l a w,    our      s c ope      of       r e vi e w i s     de       novo    wi t h    no    pr e s u mpt i on      of

c or r e c t ne s s     f or      t he    t r i al     c our t ' s    c onc l us i o n .     Ada ms       v.    De a n

Ro o f i n g    Co. ,       715      S. W 2d
                                         .           341   ( Te nn.      Ap p .   1986) ;     Bi l l i ngt on       v.

Cr o wd e r , 553 S. W 2d 590 ( Te nn. App. 1977) .
                      .



         Th e Pl a i nt i f f s '        a r gue t ha t s i nc e t hi s i s a ne gl i ge nc e c l a i m,

p r i v i t y i s not r e qui r e d t o ma i nt a i n t hi s a c t i on unde r Te nne s s e e ' s

a n t i - p r i vi t y s t a t ut e , c odi f i e d a t Te nne s s e e Code Annot a t e d § 29- 3 4 -

1 0 4 , wh i c h s t a t e s :



         Pr i vi t y not r e qui r e d. - - I n a l l c a us e s of a c t i on f or
         p e r s ona l i nj ur y or pr ope r t y da ma ge br ought on a c c ount of
         n e gl i ge nc e , s t r i c t l i a bi l i t y o r wa r r a nt y, i n c l udi ng

                                                             3
           a c t i ons br ought unde r t he pr ovi s i ons of t h e Uni f or m
           Co mme r c i a l Code , pr i v i t y s ha l l not be a r e qui r e me nt t o
           ma i nt a i n s a i d a c t i on.



           We    a gr e e    wi t h t he       Pl a i nt i f f s '      c ont e nt i on       t ha t     s i nc e    t he y

a l l e ge d pr ope r t y da ma ge t o t he i r home a s a r e s ul t of ne gl i ge nc e of

t he       d e f e nda nt s ,    pr i vi t y     is      not         r e qui r e d     unde r       t he      s t a t ut e .

Al t h o u g h      t r a di t i ona l l y   t hi s     s t a t ut e      ha s       be e n    a s s oc i a t e d    wi t h

p r o d u c t l i a bi l i t y a c t i ons , i t s pl a i n l a ngua ge i n no wa y l i mi t s i t s

a p p l i c a t i on i n a wa y t ha t woul d pr e c l ude i t f r om be i ng a ppl i e d t o

s u b s e q u e nt pur c ha s e r s of a r e s i de nc e .



           Thi s     Cour t     ha s    pr e vi ous l y        a ddr e s s e d       t hi s   i s s ue     in    Re d b u d

Co o p e r a t i ve Cor p. v. Cl a yt on, 700 S. W 2d 551 ( Te nn. App. 1985) .
                                                  .                                                                      In

Re d b u d, a home owne r ' s a s s oc i a t i on a nd i ndi vi dua l home owne r s s ue d a

d e v e l o p e r ove r dr a i na ge pr obl e ms .               The Cour t a f f i r me d t he a wa r d o f

d a ma g e s a ga i ns t t he de ve l ope r on a ne gl i ge nc e t he or y, e ve n t ho u g h

t h e r e c or d s howe d t ha t s ome home owne r s we r e s ubs e que nt pur c ha s e r s

a n d t h u s l a c ke d pr i vi t y wi t h t he de ve l ope r .                       The Cour t f ound t h a t

s i nc e     t he    j udgme nt        c oul d be       s u s t a i ne d ba s e d upon a                   ne gl i ge n c e

t he o r y , t he a nt i - pr i vi t y s t a t ut e a ppl i e d.                 I d. a t 559.



           Our      Supr e me Cour t         ha s     r e c ogni z e d t he e xi s t e nc e of                  cer t ai n

i mp l i e d wa r r a nt i e s of ne wl y c ons t r uc t e d home s i n                       Di xon v. Mount a i n

Ci t y Co n s t r uc t i on Co . ,           632 S. W 2d 538 ( Te nn.
                                                     .                                    1982) .           The Cou r t


                                                           4
l i mi t e d t hos e wa r r a nt i e s t o t he i ni t i a l pur c ha s e r s a nd l i mi t e d t o

a c t i o n s on a n i mpl i e d wa r r a nt y t he or y.                Thi s c a s e , howe ve r , i s no t

a wa r r a nt y c a s e but i s ba s e d upon ne gl i ge nc e .                    I n vi e w of t he a n t i -

p r i vi t y s t a t ut e s e t a bout a bove , we s e e no r e a s on pr i vi t y s houl d b e

r e q u i r e d t o ma i nt a i n a n a c t i on f or             ne gl i ge nc e .       W hol d t h a t
                                                                                           e                        a

s u b s e q u e nt pur c ha s e r ma y ma i nt a i n a ne gl i ge nc e a c t i on a ga i ns t t h o s e

who c on s t r uc t e d a r e s i de nc e , i f t he de f e c t s c l a i me d t o ha ve c a us e d

t he i n j ur y a r e l a t e nt one s , not known or r e a s ona bl y di s c ove r a bl e t o

e i t he r     t he     pr e vi ous      own e r s    or      oc c upi e r s ,      or    t he       s ubs e qu e n t

pur c ha s e r .        Si nc e pr e vi ous owne r s ma y c a us e da ma ge t ha t a s ub s e -

que nt       p ur c ha s e r    mi ght     mi s t a ke nl y     a t t r i but e    to    t he    bui l de r ,     or

wo r s e n a c ondi t i on c a us e d by t he bui l de r , we be l i e ve i t onl y f a i r

to     r e qui r e      l ack    of      knowl e dge       by     t he     pr e vi ous     owne r       f or    t he

s u b s e q u e nt    pur c ha s e r s t o s t a t e a c l a i m f or ne gl i ge nc e a s t o t h e

bui l de r .



         W do not be l i e ve t ha t our de c i s i on t oda y a nd t ha t i n Re d b u d
          e

c ont r a di c t s      in     a ny   wa y   t he    Di xon       case.           Al t hough     a     c l a i m of

n e g l i g e nc e i n t he c ons t r u c t i on of             a home i s s i mi l a r           t o a cl ai m

u n d e r a n i mpl i e d wa r r a nt y, t he r e a r e di f f e r e nc e s t ha t di s t i ngu i s h

t h e t wo .         The Supr e me Cour t of Col or a do di s c us s e d t he di f f e r e n c e s

b e t we e n t he t wo t he or i e s i n Cos mopol i t a n Home s , I nc . v. W l l e r , 6 6 3
                                                                               e

P. 2 d 1 0 41 ( Col o. 1983) ( e n ba nc ) :




                                                        5
                  Some ove r l a p i n e l e me nt s of pr oof of s uc h a c t i o n s
        ma y oc c ur , but t he s c ope of dut y di f f e r s a nd t he ba s i s
        f o r l i a bi l i t y i s d i s t i ngui s ha bl e .    The i mpl i e d wa r r a nt y
        o f ha bi t a bi l i t y a nd f i t ne s s a r i s e s f r om t he c ont r a c t ua l
        r e l a t i on be t we e n t he bui l de r a nd t he pur c ha s e r . Pr oof of
        a de f e c t due t o i mpr ope r c ons t r uc t i on, de s i g n , o r
        p r e pa r a t i on i s s uf f i c i e nt t o e s t a bl i s h l i a bi l i t y i n t he
        b u i l de r - ve ndor .      Ne gl i ge nc e , howe ve r , r e qui r e s t ha t a
        b u i l de r or c ont r a c t or be he l d t o a s t a nda r d of r e a s ona bl e
        c a r e i n t he c onduc t of i t s dut i e s t o t he f or e s e e a bl e
        u s e r s of t he p r o pe r t y. . . . Ne gl i ge nc e i n t or t mus t
        e s t a bl i s h de f e c t s i n wor kma ns hi p, s upe r vi s i on, or de s i gn
        a s a r e s pons i bi l i t y of t he i ndi vi dua l de f e nda nt .              Pr oof
        o f de f e c t a l one i s n ot e nough t o e s t a bl i s h t he c l a i m.
        Fo r e s e e a bi l i t y l i mi t s t he s c ope of t he dut y, a nd t he
        p a s s a ge of t i me f ol l o wi ng c ons t r uc t i on ma ke s c a us a t i on
        d i f f i c ul t t o pr ove .



W l l e r a t 1045 ( c i t a t i ons omi t t e d) .
 e



        W a l s o f i nd a mpl e s uppor t
         e                                                 f or   our       de c i s i on f r om nume r o u s

o t h e r j ur i s di c t i ons .        Se e Br own v.        Fowl e r ,      279 N. W 2d 907 ( S. D.
                                                                                       .

1979)     ( s ubs e que nt       pur c ha s e r s   ma y     s t at e   a     c l a i m f or     ne gl i ge n c e

a ga i n s t a bui l de r , a l t hough i mpl i e d wa r r a nt i e s do not e xt e nd be y o n d

t he   fi rst      p ur c ha s e r ) ;   W i ght
                                          r         v.     Cr e a t i ve     Cor p. ,     4 9 8 P. 2d 1 1 7 9

( Co l o . App. 1972) ( s ubs e que nt pur c ha s e r s c oul d ma i nt a i n a c t i on f o r

n e g l i g e nc e , but not i mpl i e d wa r r a nt y of me r c ha nt a bi l i t y) ; Cobur n v .

Le n o x Home s , I nc . , 173 Conn. 567, 378 A. 2d 599 ( 1977) ( s ubs e qu e n t

pur c ha s e r s   ma y s t a t e a c l a i m i n ne gl i ge nc e f or                  l a t e nt   de f e c t s ,

a l t h o u g h t he i mpl i e d wa r r a nt y doe s not e xt e nd t o t he m) ; Pa r l i a me nt

Towe r s Condomi ni um v. Pa r l i a me nt Hous e Re a l t y, I nc . , 377 So. 2d 9 7 6

( Fl a . Ap p. 1979) ( pr i vi t y no t r e qui r e d f or ne gl i ge nc e a c t i on a ga i n s t


                                                      6
bui l de r     or       a r c hi t e c t ,    bu t   is   r e qui r e d     f or    br e a c h     of    i mpl i e d

wa r r a n t y) ; Na va j o Ci r c l e , I nc . v. De ve l opme nt Conc e pt s Cor p. , 3 7 3

So . 2 d 6 89 ( Fl a . App. 1979) ( l a c k of pr i vi t y doe s not a f f e c t a t o r t

c l a i m s o l ong a s t he p l a i n t i f f c a n e s t a bl i s h t he e xi s t e nc e of a

d u t y ) ; Si mmons v. Owe ns , 3 63 So. 2d 142 ( Fl a . App. 1978) ( s ubs e que n t

p u r c h a s e r c a n ma i nt a i n ne gl i ge nc e a c t i on a ga i ns t bui l de r f or l a t e n t

d e f e c t s not       di s c ove r a bl e by r e a s ona b l e i ns pe c t i on) ;             M Donough v .
                                                                                                  c

W a l e n,
 h            313        N. E. 2 d      435     (M ss.
                                                  a           1974) ( bui l de r / c ont r a c t or       ma y   be

l i a b l e f or i nj ur i e s or da ma ge c a us e d by hi s ne gl i ge nc e t o pe r s o n

wi t h wh o m he ha s no c ont r a c t ua l r e l a t i ons hi p) ; Ke ye s v. Guy Ba i l e y

Home s ,     I nc . ,      439     So. 2d      670    (M ss.
                                                        i           1983) ( bui l de r / ve ndor          ma y b e

l i a b l e on ba s i s of             ne gl i ge nc e or        br e a c h of     i mpl i e d wa r r a nt y t o

s u b s e q u e nt pur c ha s e r s de s pi t e l a c k of pr i vi t y) ; Le i gh v. W ds wor t h,
                                                                                      a

3 6 1 P. 2 d 849 ( Okl a .              1961) ( l a c k of pr i vi t y doe s not                 ba r r e c ov e r y

a ga i n s t bui l de r f or c ondi t i ons i mme di a t e l y da nge r ous ) ; Te r l i nd e v .

Ne e l y,    275 S. C.         395,      271 S. E. 2 d 768 ( 1980) ( s ubs e que nt pur c ha s e r s

ma y a s s e r t a c l a i m f or l a t e nt de f e c t s unde r e i t he r i mpl i e d wa r r a nt y

o r n e g l i ge nc e t he or i e s ) ; Moxl e y v. La r i me e Bui l de r s , I nc . , 600 P. 2 d

7 3 3 ( W o. 1979) ( s ubs e que nt pur c ha s e r s ma y s ue f or br e a c h of i mpl i e d
         y

wa r r a nt y a s we l l a s s t a t e a c l a i m i n ne gl i ge nc e ) .



        W do not
         e                    be l i e ve t h a t    pe r mi t t i ng a c t i ons a ga i ns t           bui l de r s

b a s e d o n ne gl i ge nc e wi l l s ubj e c t t he m t o undue ha r ds hi ps .                        The t he

Ge n e r a l As s e mbl y ha s i mpos e d a f our ye a r s t a t ut e of l i mi t a t i on o n


                                                          7
ma i nt a i ni ng a c t i ons a ga i ns t de ve l ope r s .                         Te n n.     Code Ann.             § 28 - 3 -

202.         Thi s l i mi t a t i on woul d a ppl y t o c l a i ms ba s e d on ne gl i ge n c e

s u c h a s t ha t p r e s e nt e d i n t hi s c a s e .



           I t s houl d be e mpha s i z e d t ha t our de c i s i on i s pr e di c a t e d u p o n

t hi s b e i ng a n a c t i on f or ne gl i ge nc e .                        W do not
                                                                              e                     a d d r e s s whe t h e r

r e mo t e pur c ha s e r s ha ve a c a us e of a c t i on a ga i ns t de ve l ope r s un d e r

a ny o t h e r t he or y, a nd e mpha s i z e t ha t unde r t he Di xon c a s e onl y t h e

i ni t i a l p ur c ha s e r ma y ma i n t a i n a n a c t i on unde r a n i mpl i e d wa r r a n t y

t he or y.          Nor     do      we       a ddr e s s   t he    a de qua c y           of    Pl a i nt i f f s '      pr o o f

r e g a r d i ng    t he     a l l e ge d       ne gl i ge nc e     of       t he        de f e nda nt s .       Howe v e r ,

s u mma r y j udgme nt i s onl y t o be r e nde r e d by a t r i a l c our t whe n i t i s

s h o wn t ha t " t he r e i s n o g e nui ne i s s ue a s t o a ny ma t e r i a l f a c t a nd

t ha t t h e movi ng pa r t y i s e nt i t l e d t o j udgme nt a s a ma t t e r of l a w. "

T. R. C. P.        56. 03.       I n r ul i ng on a mot i on f or s umma r y j u d g me nt , t h e

t r i a l c o ur t a nd t he Cour t of Ap p e a l s mus t c ons i de r t he ma t t e r i n

t he s a me ma nne r             a s a mot i on f or              a di r e c t e d ve r di c t               ma de a t      t he

c l os e of        t he pl a i nt i f f ' s pr oof ,              i . e. ,    al l        t he e vi de nc e mus t             be

v i e we d i n t he l i ght mos t f a v o r a bl e t o t he oppone nt of t he mot i o n

a nd a l l l e gi t i ma t e c onc l us i ons of f a c t mus t be dr a wn i n f a vor o f

t he    o p p one nt .         It       is     onl y whe n t he r e            is         no di s put e d i s s ue            of

ma t e r i a l     f act     t ha t      a s umma r y j udgme nt              s houl d be gr a nt e d by t h e

t r i al    c our t       a nd s us t a i ne d by t he Cour t                       of     Appe a l s .        Gr a v e s     v.

An c h o r W r e Cor p.
            i                         of Te nne s s e e ,     692 S. W 2d 42 0 ( Te nn. App.
                                                                      .                                                198 5 ) ;


                                                             8
Be n n e t t   v.   M d- Sout h Te r mi na l s Cor p. ,
                     i                                                 660 S. W 2d 799 ( Te nn. Ap p .
                                                                               .

1983) .        Summa r y     j udgme nt      is    ge ne r a l l y      i na ppr opr i a t e   in    a   t or t

a c t i on.     Bowma n v. He na r d, 547 S. W 2d 527 ( Te nn. 1977) .
                                              .                                                     Si nc e we

c o n c l u d e t ha t     t he p l a i nt i f f   wa s       e nt i t l e d t o ma i nt a i n a n a c t i on

a ga i n s t t he de f e n d a n t s ,    i t f ol l ows t ha t s umma r y j udgme nt wa s n o t

a p p r o p r i a t e i n t hi s c a s e .



         W r e ve r s e t he j udgme nt
          e                                         of        t he t r i a l   c our t   a nd r e ma nd t h e

c a us e t o t he t r i a l c our t f or s uc h ot he r a nd f ur t he r a c t i on t ha t ma y

b e r e q u i r e d i n c onf or mi t y wi t h t h i s o pi ni on.                 Cos t s a r e t a xe d t o

t h e a pp e l l e e s .



                                                                ___________________________ _ _ _
                                                                Don T. M M r a y, J .
                                                                        c ur



CONCUR:


_ _ _ _ _ _ _ ____________________________
Ho u s t o n M Godda r d, Pr e s i di ng J udge
                .


_ _ _ _ _ _ _ ____________________________
Ch a r l e s D. Sus a no, J r . , J udge




                                                          9
                                 I N THE COURT OF APPEALS




RI CHARD BRI GGS a nd                           )      KNOX CI RCUI T
STEPHANI E R. BRI GGS,                          )      C. A. NO. 03A01- 9603- CV- 0011 5
                                                )
                                                )
            Pl a i nt i f f s - Appe l l a nt s )
                                                )
                                                )
                                                )
                                                )
                                                )
vs .                                            )      HON. DALE C. WORKMAN
                                                )      J UDGE
                                                )
                                                )
                                                )
                                                )
                                                )
RI VERSOUND LI M TED PARTNERSHI P, )
                   I                                   REVERSED AND REMANDED
W LLI AM S. NI X d/ b/ a W
  I                              SN             )
ENTERPRI SES, GENERAL PARTNER,                  )
a n d DARYL WAGNER,                             )
                                                )
            De f e nda nt s - Appe l l e e s )



                                               ORDER


       Thi s    a pp e a l   c a me on t o be he a r d upon t he r e c or d f r om t h e

Ci r c u i t Cour t of Knox Count y, br i e f s a nd a r gume nt of c ouns e l .             Up o n

c o n s i d e r a t i on t he r e of , t hi s Cour t i s of t he opi ni on t ha t t he r e wa s

r e v e r s i bl e e r r or i n t he t r i a l c our t .

       W r e ve r s e t he j udgme nt
        e                                      of   t he t r i a l   c our t   a nd r e ma nd t h e

c a us e t o t he t r i a l c our t f or s uc h ot he r a nd f ur t he r a c t i on t ha t ma y
b e r e q u i r e d i n c onf or mi t y wi t h t hi s opi n i o n .   Cos t s a r e t a xe d t o

t h e a pp e l l e e s .



                                                PER CURI AM




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