                   IN THE COURT OF APPEALS OF TENNESSEE
                               AT NASHVILLE
                                       May 25, 2010 Session

  JERRY ANN WINN v. WELCH FARM, LLC, and RICHARD TUCKER

             Direct Appeal from the Chancery Court for Montgomery County
            No. MC-CH-CB-CD-07-62        Laurence M. McMillian, Chancellor


                      No. M2009-01595-COA-R3-CV - Filed June 4, 2010


This is an appeal from the trial court’s decision to grant summary judgment to the Appellees.
After reviewing the record, we find that the order granting summary judgment fails to comply
with Tenn. R. Civ. P. 56.04, as it does not “state the legal grounds upon which the court
denies or grants the motion.” Consequently, this Court cannot proceed with our review and
must vacate the judgment of the trial court.


 Tenn. R. App. P. 3. Appeal as of Right; Judgment of the Chancery Court Vacated
                                  and Remanded

J. S TEVEN S TAFFORD, J., delivered the opinion of the Court, in which A LAN E. H IGHERS, P.J.,
W.S., and D AVID R. F ARMER. J., joined.

W. Timothy Harvey, Clarksville, Tennessee, for the appellant, Jerry Ann Winn.

Joe Weyant, Clarksville, Tennessee, for the appellees, Welch Farm, LLC, and Richard
Tucker.


                                              OPINION

       On November 26, 2007, Appellant Jerry Ann Winn (“Ms. Winn”), filed a complaint
for damages against Appellee Welch Farm, LLC (“Welch”). In her complaint, Ms. Winn
averred that on April 5, 2005, she purchased Lot 125 in phase three of the Savannah Chase
development (the “lot”) from Welch, as evidenced by a Cash Warranty Deed.1 Ms. Winn


       1
           A copy of the warranty deed is included with Ms. Winn’s deposition as attached to Welch’s
                                                                                        (continued...)
alleged on March 23, 2007, when excavation began on the lot so that a new residence could
be constructed, water immediately filled the excavated troughs. According to her complaint,
an investigation by an engineer was conducted the next day, and it was discovered that the
drainage flow of the lot had been altered, destroying the “structural integrity” of the lot. She
alleged that Welch was or should have been aware of the drainage issue when it sold her the
lot. Ms. Winn submitted that the actions of Welch created a permanent nuisance and that it
breached implied warranties regarding the suitability of the lot for construction of a
residence. Ms. Winn requested compensatory damages “for breach of implied warranties
between the Parties, [Welch’s] imposition of a permanent nuisance upon [Ms. Winn’s]
property, and diminution in value of [Ms. Winn’s] property”; punitive damages; and
rescission of the contract.

        Welch filed an answer on February 7, 2008 wherein it admitted selling Ms. Winn the
lot at issue. Welch submitted that the warranty deed contained all the terms, conditions,
duties and obligations of the parties. Welch denied knowledge of the drainage issue as
alleged by Ms. Winn, denied that the lot was impaired, denied that there was a permanent
nuisance on the lot, denied breaching any implied warranties, and denied diminution in the
value of the lot.

       On October 27, 2008, Welch filed a motion for summary judgment along with a
supporting memorandum of law and statement of undisputed facts. In its memorandum,
Welch submitted that Ms. Winn brought two claims against it: breach of implied warranty
and creation of a permanent nuisance. Welch argued that it was entitled to summary
judgment on the issue of implied warranty as no such claim is recognized in Tennessee. Also,
Welch argued that it was entitled to summary judgment on the nuisance issue as it did not
take any action to divert surface water to Ms. Winn’s lot and therefore did not create a
nuisance. Welch’s statement of undisputed facts stated in pertinent part:

               7. Welch Farms, LLC did not change anything or cause any sort
               of diversion of surface water in or around the Property during
               development of Phase 3 of the surrounding subdivision.

               8. Ms. Winn is not aware of any individual who can state that
               the Defendant Welch Farms, LLC caused a diversion of service
               water from an old drainage field near the Property.

Welch attached portions of Richard Tucker’s and Ms. Winn’s depositions to its statement of


       1
        (...continued)
statement of undisputed facts in support of its Motion for Summary Judgment.

                                                 -2-
facts.2

        On January 9, 2009, Ms. Winn filed her response to Welch’s motion for summary
judgment, contending that genuine issues of material fact exist. In support of her response,
Ms. Winn filed a memorandum of law, a response to Welch’s statement of undisputed facts,
and an additional statement of undisputed facts. In response to Welch’s statement of
undisputed facts, Ms. Winn admitted all of the stated facts except numbers 7 and 8 as quoted
above. In response to facts 7 and 8, Ms. Winn submitted that she was without sufficient
knowledge to admit or deny these facts.3 In her additional statement of undisputed facts, Ms.
Winn stated that the engineering firm she used to investigate the lot had previously been
consulted by Welch with regard to similar issues and recommendations on that lot, that
Richard Tucker- the managing agent of Welch and a real estate broker - was aware of the soil
conditions on the lot, and that Richard Tucker did not disclose the conditions of the lot or its
suitability for a residential structure. In her memorandum, Ms. Winn argued that “disclosure
of soil conditions was due [to her] when she purchased her lot.”

      Also, on January 9, 2009, Ms. Winn filed a motion requesting permission to amend
her complaint. According to her motion, she sought to add Appellee, Richard Tucker (“Mr.
Tucker”) as a defendant, and to further amend her complaint to conform with the evidence.


          2
         We note that the entire deposition of Ms. Winn appears in the record. However, the trial court only
had before it the portions of the deposition. In reviewing the trial court’s decision, this court will only
consider the evidence which was before the trial court when it made its decision granting the motion for
summary judgment. Cole v. Clifton, 833 S.W.2d 75, 78 (Tenn. Ct. App. 1992).
          3
              We note that Tenn. R. Civ. P. 56.03 provides in pertinent part:

                     Any party opposing the motion for summary judgment must, not later than
                     five days before the hearing, serve and file a response to each fact set forth
                     by the movant either (i) agreeing that the fact is undisputed, (ii) agreeing
                     that the fact is undisputed for the purposes of ruling on the motion for
                     summary judgment only, or (iii) demonstrating that the fact is disputed.
                     Each disputed fact must be supported by specific citation to the record.
                     Such response shall be filed with the papers in opposition to the motion for
                     summary judgment.

 Ms. Winn’s response does not comply with the requirements of this rule. “Although, the trial court may,
 at its discretion, waive the requirements of this rule where appropriate, ... material facts set forth in the
 statement of the moving party may be deemed admitted in the absence of a statement controverting them
 by the opposing party.” Holland v. City of Memphis, 125 S.W.3d 425, 428 (Tenn. Ct. App. 2003)(citations
 omitted).



                                                          -3-
Attached to her motion was a copy of the proposed amended complaint, the report from the
engineering firm which investigated the lot in 2007, and portions of Mr. Tucker’s deposition.

        Welch filed a response to Ms. Winn’s additional statement of undisputed facts on
January 13, 2009. In its response to the allegations that it had retained the same engineering
firm as Ms. Winn with regard to issues on her lot, Welch stated that it was undisputed that
it had previously retained the firm, but not for Ms. Winn’s lot. Welch further stated that this
fact was not material to the issues before the court. In response to Ms. Winn’s statement that
Mr. Tucker was aware of the soil conditions, Welch stated that Mr. Tucker was aware of the
soil conditions in all of the development, but his knowledge as to Ms. Winn’s lot was “that
it was marketable....” Welch also disputed that Mr. Tucker was a licensed real estate broker.

        The trial court entered an order on January 28, 2009. This order reflects that the trial
court heard arguments on Welch’s motion for summary judgment. However, the trial court,
in this order, reserved judgment on the motion. Further, in this order, the trial court granted
Ms. Winn permission to amend her complaint. The record does not contain a transcript of
this hearing.

       On February 19, 2009, Ms. Winn filed a Second Amended Complaint for Damages.4
 The amended complaint adds Mr. Tucker as a defendant. The complaint alleged that Welch
and/or Mr. Tucker were aware or should have been aware that the lot was not suitable for
construction of a residence. Ms. Winn also averred that Mr. Tucker had a higher duty
pursuant to Tenn. Code Ann. § 62-13-101, as a licensed real estate agent “to disclose known
possible defects and soil deficiencies” and that failure to disclose was a breach of the
Tennessee Real Estate Broker License Act of 1973, Tenn. Code Ann. § 62-13-401 through
-408, and a breach of the duty of good faith and fair dealing. Ms. Winn also alleged that Mr.
Tucker’s failure to disclose was a violation of the Tennessee Consumer Protection Act, Tenn.
Code. Ann. § 47-18-101 et seq (“TCPA”). According to her amended complaint, Ms. Winn
sought damages for “breach of implied warranties between the Parties, the Respondent’s
imposition of a permanent nuisance upon [her] property, and the diminution of value of [her]
property”, as well as punitive damages; rescission of the contract; and attorney’s fees.
Specifically as to Mr. Tucker, Ms. Winn sought damages for his violation of the Tennessee
Real Estate Broker License Act of 1973, “negligence in breaching such statutory duty”, for
breach of the duty of good faith and fair dealing, and for his violation of the TCPA.




        4
         It is not clear from the record why Ms. Winn’s complaint was styled a “Second Amended
Complaint.” There does not appear to have been any amendments to the original complaint prior to the filing
of the Second Amended Complaint.

                                                   -4-
       On March 5, 2009, Welch and Mr. Tucker filed an answer to Ms. Winn’s amended
complaint. The answer was substantially the same as Welch’s original answer. Mr. Tucker
denied that he was a licensed real estate broker at the time of the transaction with Ms. Winn.
Welch and Mr. Tucker denied all further allegations.

      On April 21, 2009, Welch and Mr. Tucker filed another motion for summary
judgment, along with another statement of undisputed facts and memorandum of law in
support of their motion. The statement of undisputed facts stated in pertinent part:

                7. Neither Welch Farms, LLC, nor Richard Tucker did anything
                to change or cause any sort of diversion of surface water in or
                around the Property during the development of Phase 3 of the
                surrounding sub-division.

                8. Ms. Winn is not aware of any individual who can state that
                the Defendants caused a diversion of service water from an old
                drainage field near the Property.5

                9. Richard Tucker is not aware of any soil deficiencies on lot
                125.

                10. Richard Tucker is not a licensed real estate broker.

As before, in the memorandum of law, Welch and Mr. Tucker submitted that Ms. Winn
brought two claims against them: breach of implied warranty and creation of a permanent
nuisance. Welch and Mr. Tucker argued that they were entitled to summary judgment on the
issue of implied warranty as no such claim is recognized in Tennessee. Also, Welch and Mr.
Tucker argued that they were entitled to summary judgment on the nuisance issue as they did
not take any action to divert surface water to Ms. Winn’s lot and therefore did not create a
nuisance. As to the nuisance claim, Welch and Mr. Tucker submitted that Ms. Winn is
unable to prove an essential element of her claim. Mr. Tucker also notes that Ms. Winn
brought two additional claims against him alone: violation of the TCPA and violation of the
Real Estate Broker License Act. Mr. Tucker submitted that the TCPA claim should fail
because he was unaware of any defects. Mr. Tucker also submitted the Real Estate Broker
License Act claim should fail as he was not a licensed real estate broker and there was no
agency relationship between he and Ms. Winn. Welch and Mr. Tucker attached portions of
Mr. Tucker’s and Ms. Winn’s depositions, and an affidavit from Mr. Tucker stating that he


        5
          This Court notes that in paragraph seven, the Appellees refer to “surface water” and in paragraph
eight, they refer to “service water.” The difference between the two terms is not clear from the record.

                                                   -5-
is not a licensed real estate broker and did not have a written agreement with Ms. Winn
establishing an agency relationship.

        Ms. Winn filed a response of May 22, 2009, including a response to the statement of
undisputed facts, and an additional statement of undisputed facts. Ms. Winn admitted all of
the facts as provided by Welch and Mr. Tucker except for facts 7 and 9 as quoted above. Ms.
Winn admitted that Mr. Tucker was not a licensed real estate broker, that she and Mr. Tucker
did not have a written agreement establishing an agency relationship, and submitted that she
was without sufficient knowledge to admit or deny the assertion that Welch nor Mr. Tucker
did anything to change or cause the diversion of surface water.6 Ms. Winn’s additional
statement of undisputed facts was similar to her previously filed statement. Also, Welch and
Mr. Tucker filed a response to the additional facts on May 27, 2009, which was the same as
their previously filed response.

       Ms. Winn filed an amended memorandum in opposition to the motion for summary
judgment on May 28, 2009. Again, Ms. Winn argued that Welch and Mr. Tucker should
have disclosed the soil conditions of her lot prior to her purchase. Ms. Winn argued that
other jurisdictions would hold Welch and Mr. Tucker liable for their omissions, citing to
cases from other states based on implied warranties. Further, Ms. Winn argued that Welch
and Mr. Tucker had a duty to deal in good faith implied by contract, and also that since Mr.
Tucker was once a licensed real estate agent he must still comply with the standards of
licensed agents.

        The trial court heard the motion for summary judgment on May 29, 2009. On June
26, 2009, the trial court entered an order granting the motion for summary judgment and
dismissing all of Ms. Winn’s claims against Welch and Mr. Tucker. As stated by the trial
court in its order, “the Court believes there are no genuine issues of material fact and that the
Respondents are entitled to judgment as a matter of law.” The record does not contain a
transcript of this hearing.

        Ms. Winn filed a notice of appeal on July 27, 2009. She raises the following issues


        6
         Again, Ms. Winn failed to comply with the requirements of Tenn. R. Civ. P. 56.03 as discussed in
footnote three above. This failure, however, does not affect this Court’s analysis. First, it is not clear
whether the trial court, using its discretion, waived the requirements of the rule or deemed the facts admitted.
Holland v. City of Memphis, 125 S.W.3d 425, 428 (Tenn. Ct. App. 2003)(citations omitted). Second, it
appears that these facts, disputed or undisputed, are not relevant to a claim based upon duty to disclose or
breach of implied warranty. Finally, as discussed below, this Court cannot determine from the record the
legal basis upon which the trial court granted summary judgment; and therefore cannot be certain of the
relevance of these facts in the trial court’s decision.


                                                      -6-
for our review:

               1. Whether the Appellees had a duty to disclose possible adverse
               soil conditions within the subject undeveloped lot?

               2. Whether an implied warranty of suitablity for residential
               construction exists in the subject transaction, pertinent to the lot
               itself?

               3. Whether, when considering the above analysis, the trial court
               erred in its granting of summary judgment to the respondents,
               finding that no genuine issue of material fact existed in this
               case?

        A trial court’s decision to grant a motion for summary judgment presents a question
of law. Our review is therefore de novo with no presumption of correctness afforded to the
trial court’s determination. Bain v. Wells, 936 S.W.2d 618, 622 (Tenn. 1997). “This Court
must make a fresh determination that the requirements of Tenn. R. Civ. P. 56 have been
satisfied.” Mathews Partners, LLC v. Lemme, No. M2008-01036-COA-R3-CV, 2009 WL
3172134 at *3 (citing Hunter v. Brown, 955 S.W.2d 49, 50-51 (Tenn. 1977).

        When a motion for summary judgment is made, the moving party has the burden of
showing that “there is no genuine issue as to any material fact and the moving party is
entitled to judgment as a matter of law.” Tenn. R. Civ. P. 56.04. The moving party may
accomplish this by either: (1) affirmatively negating an essential element of the non-moving
party’s claim; or (2) showing that the non-moving party will not be able to prove an essential
element at trial. Hannan v. Alltel Publ’g Co., 270 S.W.3d 1, 8-9 (Tenn. 2008). However,
“[i]t is not enough for the moving party to challenge the nonmoving party to ‘put up or
shutup’ or even to cast doubt on a party’s ability to prove an element at trial.” Id. at 8. If the
moving party’s motion is properly supported, “[t]he burden of production then shifts to the
nonmoving party to show that a genuine issue of material fact exists.” Id. at 5(citing Byrd
v. Hall, 847 S.W.2d 208, 215(Tenn. 1993)). The non-moving party may accomplish this by:
“(1) pointing to evidence establishing material factual disputes that were overlooked or
ignored by the moving party; (2) rehabilitating the evidence attacked by the moving party;
(3) producing additional evidence establishing the existence of a genuine issue for the trial;
or (4) submitting an affidavit explaining the necessity for further discovery pursuant to Tenn.
R. Civ. P., Rule 56.06.” Martin v. Norfolk Southern Railway. Co., 271 S.W.3d 76, 84
(Tenn. 2008)(citations omitted).

       When reviewing the evidence, we must determine whether factual disputes exist. In

                                               -7-
evaluating the trial court’s decision, we review the evidence in the light most favorable to the
nonmoving party and draw all reasonable inferences in the nonmoving party’s favor. Stovall
v. Clarke, 113 S.W.3d 715, 721 (Tenn. 2003). If we find a disputed fact, we must
“determine whether the fact is material to the claim or defense upon which summary
judgment is predicated and whether the disputed fact creates a genuine issue for trial.”
Mathews Partners, 2009 WL 3172134 at *3(citing Byrd, 847 S.W.2d at 214). “A disputed
fact is material if it must be decided in order to resolve the substantive claim or defense at
which the motion is directed.” Byrd, 847 S.W.2d at 215. A genuine issue exists if “a
reasonable jury could legitimately resolve the fact in favor of one side or the other.” Id.
“Summary Judgment is only appropriate when the facts and the legal conclusions drawn from
the facts reasonably permit only one conclusion.” Landry v. South Cumberland Amoco, et
al, No. E2009-01354-COA-R3-CV (Tenn. Ct. App. March 10, 2010)(citing Carvell v.
Bottoms, 900 S.W.2d 23 (Tenn. 1995)).


        In 2007, Tennessee Rule of Civil Procedure 56.04 was amended to require the trial
court to “state the legal grounds upon which the court denies or grants the motion,” and to
include such statement in the order reflecting the trial court’s ruling. When the legal grounds
for the trial court’s decision are omitted, a reviewing court cannot analyze the decision’s
validity, and appellate review becomes unnecessarily speculative. “Without such a
statement...a reviewing court is left to wonder on what grounds the trial court granted the
motion for summary judgment.” Eluhu v. HCA Health Servs. Of Tenn. Inc., No. M2008-
01152-COA-R3-CV, 2009 WL 3460370, at *21 The 2007 amendment to Tenn. R. Civ. P.
56.04 was intended to cure this problem. The Rule’s requirements are specific and without
exception. Tenn. R. Civ. P. 56.04; see also Eluhu, 2009 WL 3460370, at *21(vacating the
trial court’s grant of summary judgment upon finding that the trial court did not state the
legal grounds upon which the trial court granted the motion); Burse v. Hicks, No. W2007-
02848-COA-R3-CV, 2008 WL4414718, at *2 (Tenn. Ct. App. Sept. 30, 2008)(finding
noncompliance with Rule 56.04 where trial court’s order merely provided “it is hereby
ordered, adjudged and decreed that the Motion for Summary Judgment of [the defendant] is
well taken and should be granted pursuant to law and there being no material disputed fact,”
but proceeding with appellate review upon a finding that there was only a “clear legal
issue”).


        The order before this Court does not comply with Rule 56.04. It merely states “the
Court believes there are no genuine issues of material fact and that the Respondents are
entitled to judgment as a matter of law.” After reviewing the record, unlike Burse, this Court
cannot find that this appeal presents a “clear legal issue.” Ms. Winn’s amended complaint
presents numerous legal theories upon which her claims against both Welch and Mr. Tucker

                                              -8-
are based. Further, the parties dispute on appeal, which facts are undisputed. We note that
in other cases, this Court has “soldier[ed] on without guidance from the trial court.” Church
v. Perales, 39 S.W.3d 149, 158 (Tenn. Ct. App. 2000); see White v. Pulaski Elec. Sys., No.
M2007-01835-COA-R3-CV, 2008 WL 3850525, *3 (Tenn. Ct. App. Aug. 18,
2008)(proceeding with review after determining that the legal grounds upon which the trial
court granted summary judgment were “readily found” in the transcript of the hearing
contained in the record and that the revisions to the rule became effective after the hearing
and only twelve days prior to the entry of the order.); and Burgess v. Kone, Inc., No. M2007-
0259-COA-R3-CV, 2008 WL 2796409, * (Tenn. Ct. App. July 18, 2008)(proceeding with
review after finding that the basis for the trial court’s decision was “readily ascertainable”
from a CD-Rom of the hearing that was contained within the appellate record).
Unfortunately in this case, unlike Church and White, we are unable “soldier on” as the
record does not contain a transcript of the hearings on the motions for summary judgment or
any other indication of the legal grounds upon which the trial court based its decision. At
best we would be speculating as to the reasoning behind the trial court’s decision and the
facts it considered. Consequently, we must vacate the order of the trial court. We cannot
proceed with a review, speculating on the legal theories upon which the trial court may have
ruled and the legal conclusions the trial court may have made. Costs of this appeal are taxed
one-half to the Appellant, Jerry Ann Winn and her surety and one-half to Appellees Welch
Farm, LLC, and Richard Tucker for which execution may issue if necessary.




                                                   _________________________________
                                                   J. STEVEN STAFFORD, JUDGE




                                             -9-
