                                                                                                         11/29/2017
                  IN THE COURT OF APPEALS OF TENNESSEE
                              AT NASHVILLE
                                        June 7, 2017 Session

                     ALISA LEIGH ELDRIDGE V. LEE SAVAGE

                     Appeal from the Circuit Court for Overton County
                      No. 2010-CV-49      Jonathan L. Young, Judge


                                 No. M2016-01373-COA-R3-CV


This dispute arises from Buyer’s purchase of a home from Seller in 1994. After
discovering extensive pre-existing fire damage to the home in 2010, Buyer filed a
complaint against Seller, alleging misrepresentation, mistake, and violation of the
Tennessee Consumer Protection Act. The trial court granted summary judgment in favor
of Seller, finding that Buyer’s cause of action was barred by the applicable statute of
limitations. Buyer appeals, alleging that Seller’s fraudulent misrepresentations and
concealment and the discovery rule tolls the statutes of limitations. She also contends
these are factual issues to be determined by a jury. We have concluded that a reasonable
jury could not legitimately resolve the facts relied upon by Buyer in her favor; therefore,
the trial court acted appropriately by summarily dismissing all of her claims as time
barred. Accordingly, we affirm.

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

FRANK G. CLEMENT JR., P.J., M.S., delivered the opinion of the Court, in which ANDY D.
BENNETT and W. NEAL MCBRAYER, JJ., joined.

Michael Robert Giaimo, Cookeville, Tennessee, for the appellant, Alisa Leigh Eldridge.

Craig P. Fickling, Cookeville, Tennessee, for the appellee, Lee Savage.

                                              OPINION

      Alisa Leigh Eldridge (“Mrs. Eldridge”)1 purchased the home at issue from Lee
Savage (“Mr. Savage”) on November 1, 1994. Almost sixteen years later, in August
2010, Mrs. Eldridge filed a complaint against Mr. Savage, alleging fraudulent
        1
          Mrs. Eldridge’s husband, whom she married after purchasing the house from Lee Savage, was
also an original party to this action, but his claims were dismissed, and he is not a party to this appeal.
misrepresentation, mistake, and violation of the Tennessee Consumer Protection Act
(“TCPA”). The crux of her complaint was that Mr. Savage made false statements of fact
regarding the nature and extent of the fire damage to the home and the subsequent repairs
he made. Mrs. Eldridge alleged that she relied upon Mr. Savage’s express statements that
he had repaired the fire damage, and she claimed that she had acted as a reasonably
prudent person in her inspection and purchase of the home. Mrs. Eldridge sought
compensatory damages, or in the alternative, to rescind the original contract based on a
mutual misunderstanding or mistake regarding the nature and extent of the fire damage.

        At the time of the purchase, Mr. Savage informed Mrs. Eldridge and her then-
fiancé, now husband, that the home had previously been damaged by fire. Based on this
disclosure, and prior to Mrs. Eldridge purchasing the home, the Eldridges personally
inspected the home at which time they observed “visible damage from the fire,” noting
that the home’s kitchen cabinets were “caramel color due to being heat scorched,” and
observed that the home had at least one “burnt floor joist in the basement.” As part of the
pre-closing financing process through the Federal Housing Administration (“FHA”), a
professional home inspection was also performed. The inspector’s report indicated, inter
alia, that “no environmental hazards were noted or reported.” Thereafter, Mrs. Eldridge
decided to purchase the home, relying on the results of the inspections of the home and
Mr. Savage’s representations that he had repaired the fire damage and that the home was
“livable.”

        In the nearly sixteen years that followed, the Eldridges had two children. Their
oldest child developed chronic respiratory problems that progressively worsened. In
January 2010, when the child was about nine years old, specialists at Vanderbilt
University Medical Center advised the Eldridges that environmental conditions in the
home could be causing or contributing to their daughter’s condition and recommended
they scrub the house with bleach. In February 2010, while Mrs. Eldridge was scrubbing
the kitchen cabinets with bleach, she noticed “black soot” appearing on the surface of the
cabinets. The more she scrubbed, the more soot appeared, and a terrible odor resulted.
This prompted the Eldridges to inspect the rest of the house. They discovered “extensive
fire damage” behind the refrigerator, behind the cabinets, in the walls, and charred
flooring was also discovered beneath the linoleum that Mr. Savage installed. The
Eldridges also discovered that the HVAC return was filled with soot.

       Shortly after this action was commenced, Mr. Savage filed a motion to dismiss the
complaint on the basis that all claims were barred by various statutes of limitations. In
response, Mrs. Eldridge argued that action was timely given the fraudulent
misrepresentations of Mr. Savage and that the discovery rule tolled running of the statutes
of limitations. Following a hearing on the motion to dismiss, the trial court dismissed the
complaint. With respect to the timeliness of the claims asserted by Mrs. Eldridge, the trial
court found that the facts as acknowledged by Mrs. Eldridge in the complaint were


                                           -2-
sufficient to put a reasonable person on notice that she may have a cause of action;
therefore, the discovery rule did not toll the statutes of limitations.

      Mrs. Eldridge timely appealed the dismissal of her complaint to this court, and in
an opinion filed on December 28, 2012, we reversed and remanded for further
proceedings. In reaching our decision, we stated:

       The statute of limitations begins to run “when the plaintiff has actual
       knowledge of a claim” or of “facts sufficient to put a reasonable person on
       notice that he [or she] has suffered an injury as a result of wrongful
       conduct.” Redwing, 363 S.W.3d at 459 (emphasis added). True, Plaintiff
       knew at the time of purchase that a fire had occurred at the home. However,
       she is not suing Defendant for that reason alone. The basis of this lawsuit is
       that Defendant made false statements regarding “the nature and extent of
       the fire damage and subsequent repairs to the home.” At this stage of the
       proceedings, there is nothing to indicate that a reasonable person would
       have discovered the allegedly concealed fire damage, which was “behind
       the cabinets, in the walls and just underneath the linoleum floor,” prior to
       when it was discovered by Plaintiff. Therefore, it was premature for the
       trial court to dismiss Mrs. Eldridge’s complaint for failing to exercise
       reasonable diligence in discovering her injury.

Eldridge v. Savage, No. M2012-00973-COA-R3-CV, 2012 WL 6757941, at *6 (Tenn.
Ct. App. Dec. 28, 2012).

       Following remand, neither party submitted any discovery requests or took any
depositions. In October 2015, more than two years after the case was remanded, Mr.
Savage filed a motion for summary judgment, again asserting that the action was time
barred. Mr. Savage argued that the statutes of limitations began to run on November 1,
1994, the date Mrs. Eldridge purchased the home, because she had actual knowledge that
the home had been damaged by fire. Mr. Savage further argued that the discovery rule
did not toll the statute of limitations because Mrs. Eldridge could have discovered the
existence of the allegedly concealed fire damage by exercising reasonable care and
diligence.

       After a hearing, the trial court granted the motion for summary judgment. In
making its decision, the trial court found that Mrs. Eldridge knew the home had been
damaged by a fire, she and her fiancé inspected the home, and it was additionally
inspected by a professional as required by the FHA. The court also found it significant
that Mrs. Eldridge and her family of four had lived in the home for close to sixteen years
before filing suit. Additionally, the trial court held that Mrs. Eldridge’s claim of not
knowing the extent of the fire damage did not toll the statute of limitations, relying in part
on the following admissions made by Mrs. Eldridge:

                                            -3-
          a. The Defendant notified the Plaintiff of the fire damage prior to the
             purchase.
          b. The Plaintiff and her husband saw the fire damage prior to purchase.
          c. The Plaintiff had the home professionally inspected and the
             inspector found no issues.
          d. The Plaintiff lived in the home for over fifteen (15) years.

The trial court went on to say that while it had “sympathy for the Plaintiff, not knowing
the extent of damage does not toll the statute of limitations. The statute begins at the date
of the injury, which in this case is the purchase date and not when the injury is
discovered.” This appeal followed.

       Mrs. Eldridge has submitted one issue on appeal.

       Whether the trial court erred in granting the Defendant summary judgment,
       where the Plaintiff has demonstrated there are genuine issues of material
       fact in dispute, and the Defendant is not entitled to a judgment as a matter
       of law, as to her knowledge of the true nature and extent of fire damage to
       the home at the time of the sale, subsequent discovery of measures taken by
       the Appellee to conceal extensive fire damage not repaired, and subsequent
       discovery that affirmative statements as to the nature and condition of the
       home being fully repaired and being “livable” were false, to the extent a
       rational trier of fact could determine the discovery rule operated to toll the
       applicable statute of limitations, as a matter of law.

       We believe the dispositive issue is better stated as follows: Whether a jury could
conclude that Mr. Savage took affirmative action to conceal the causes of action asserted
by Mrs. Eldridge, and that Mrs. Eldridge could not have discovered her causes of action
and right to sue him despite exercising reasonable diligence.

                                  STANDARD OF REVIEW

       This court reviews a trial court’s decision on a motion for summary judgment de
novo without a presumption of correctness. Rye v. Women’s Care Ctr. of Memphis,
MPLLC, 477 S.W.3d 235, 250 (Tenn. 2015) (citing Bain v. Wells, 936 S.W.2d 618, 622
(Tenn. 1997)). Accordingly, this court must make a fresh determination of whether the
requirements of Tenn. R. Civ. P. 56 have been satisfied. Id.; Hunter v. Brown, 955
S.W.2d 49, 50-51 (Tenn. 1997). In so doing, we consider the evidence in the light most
favorable to the non-moving party and draw all reasonable inferences in that party’s
favor. Godfrey v. Ruiz, 90 S.W.3d 692, 695 (Tenn. 2002).



                                            -4-
        Summary judgment should be granted when “the pleadings, depositions, answers
to interrogatories, and admissions on file, together with the affidavits, if any, show that
there is no genuine issue as to any material fact and that the moving party is entitled to a
judgment as a matter of law.” Tenn. R. Civ. P. 56.04. When the party moving for
summary judgment does not bear the burden of proof at trial, it may satisfy its burden of
production “either (1) by affirmatively negating an essential element of the nonmoving
party’s claim or (2) by demonstrating that the nonmoving party’s evidence at the
summary judgment stage is insufficient to establish the nonmoving party’s claim or
defense.” Rye, 477 S.W.3d at 264 (emphasis in original).

       When a motion for summary judgment is made and supported as provided in
Tenn. R. Civ. P. 56, the nonmoving party may not rest on the allegations or denials in its
pleadings. Id. Instead, the nonmoving party must respond with specific facts showing that
there is a genuine issue for trial. Id. A fact is material “if it must be decided in order to
resolve the substantive claim or defense at which the motion is directed.” Byrd v. Hall,
847 S.W.2d 208, 215 (Tenn. 1993). A “genuine issue” exists if “a reasonable jury could
legitimately resolve that fact in favor of one side or the other.” Id.

                                         ANALYSIS

       The purpose of a statute of limitations is to compel the exercise of a right of action
within a reasonable time. “Statutes of limitations promote fairness and justice.” Redwing
v. Catholic Bishop for Diocese of Memphis, 363 S.W.3d 436, 456 (Tenn. 2012)(quoting
Pero’s Steak & Spaghetti House v. Lee, 90 S.W.3d 614, 621 (Tenn. 2002)). “They are
shields, not swords,” Redwing, 363 S.W.3d at 456 (quoting Lawman v. Barnett, 180
Tenn. 546, 565, 177 S.W.2d 121, 128 (1944)), and are based on the presumption that a
person with the legal capacity to litigate will not delay bringing suit on a meritorious
claim beyond a reasonable time. Hackworth v. Ralston Purina Co., 214 Tenn. 506, 510,
381 S.W.2d 292, 294 (1964)). These statutes are designed to prevent undue delay in
bringing suits on claims, to avoid surprising parties when the facts have become obscure
from the lapse of time, and avoid the defective memory, death or absence of witnesses.
Hackworth, 381 S.W.2d at 294.

        A defense based on the statute of limitations must address three components—the
length of the limitations period, the accrual of the cause of action, and the applicability of
any relevant tolling doctrines. Redwing, 363 S.W.3d at 456. All three elements are inter-
related and, therefore, should not be considered in isolation. Id. The length of the
limitations period is the first and most straightforward of these three elements. Id. at 457.

                      I.   THE LENGTH OF THE LIMITATIONS PERIODS

      Mrs. Eldridge asserts four separate causes of action, each of which arises from her
buying the home from Mr. Savage in 1994: (1) intentional misrepresentation, (2)

                                            -5-
negligent misrepresentation, (3) violation of the TCPA, and (4) rescission of contract
based on a failure of mutual assent. This action was commenced nearly sixteen years
after Mrs. Eldridge acquired the home from Mr. Savage, and it is undisputed that the
length of the statute of limitations for each of these claims is not more than ten years.
Therefore, the focus of our analysis will be on the second and third elements of a statute
of limitations defense.

                         II.   ACCRUAL OF THE CAUSE OF ACTION

        The second element of a statute of limitations defense relates to the concept of
accrual, or put another way, the date on which the applicable statute of limitations begins
to run. Redwing, 363 S.W.3d at 457; see also Columbian Mut. Life Ins. Co. v. Martin,
175 Tenn. 517, 526, 136 S.W.2d 52, 56 (1940); McSpadden v. Parkenson, 10 Tenn. App.
11, 18 (1928); Steven W. Feldman, 22 Tennessee Practice: Contract Law and Practice §
12:80 (2017). “A cause of action accrues and the applicable statute of limitations begins
to run when the plaintiff has a cause of action and a right to sue.” Id. (quoting Armistead
v. Clarksville–Montgomery Cnty. Sch. Sys., 222 Tenn. 486, 490, 437 S.W.2d 527, 528–29
(1969)). Traditionally, the statute of limitations began to run even when the person
entitled to an action had no knowledge of her right to sue, or the facts out of which this
right arose. Id.

       Although Ms. Eldridge is claiming she had no knowledge of her right to sue, or
the facts out of which her right to sue arose, until 2010, the causes of action she asserts in
this case accrued on November 1, 1994. That is when the deed to the home was conveyed
to her. Therefore, all of her claims are time barred unless an applicable tolling doctrine
suspends or extends the running of the limitations periods.

                                III.   TOLLING DOCTRINES

       There are two tolling doctrines at play in this case: the discovery rule, and the
doctrine of fraudulent concealment.

       For the purposes of both the discovery rule and the doctrine of fraudulent
concealment, whether a plaintiff exercised reasonable care and diligence in discovering
her injury is usually a fact question for the jury to determine. Wyatt v. A-Best, Co., 910
S.W.2d 851, 854 (Tenn. 1995).

       However, where the undisputed facts demonstrate that no reasonable trier
       of fact could conclude that a plaintiff did not know, or in the exercise of
       reasonable care and diligence should not have known, that he or she was
       injured as a result of the defendant’s wrongful conduct, Tennessee case law
       has established that judgment on the pleadings or dismissal of the
       complaint is appropriate.

                                            -6-
Schmank v. Sonic Automotive, Inc., No. E2007–01857–COA–R3–CV, 2008 WL
2078076, at *3 (Tenn. Ct. App. May 16, 2008)(internal citations omitted).

      The pivotal issue on appeal is whether Mrs. Eldridge would have discovered Mr.
Savage’s allegedly wrongful acts in concealing the fire damage had she exercised
reasonable care and diligence. Redwing, 363 S.W.3d at 466; see also Sherrill v. Souder,
325 S.W.3d at 595; In re Estate of Davis, 308 S.W.3d at 842; Teeters v. Currey, 518
S.W.2d at 516-17.

                                   A. The Discovery Rule

        Mrs. Eldridge asserts that the discovery rule should apply to toll the statutes of
limitations until 2010, the year she discovered the extent of fire damage to her home.
Mrs. Eldridge bases her argument on allegations that Mr. Savage fraudulently concealed
the extent of the fire damage and that she exercised reasonable care and diligence in
discovering her injury. We respectfully disagree, having concluded a reasonable jury
could not legitimately resolve this fact in Mrs. Eldridge’s favor. Byrd v. Hall, 847 S.W.2d
at 215.

       The discovery rule applies in “situations where the plaintiff is generally unlikely to
learn of the harm before the remedy expires.” Developments in the Law Statutes of
Limitations, 63 Harv. L. Rev. 1177, 1203 (1950). Where applicable, “the discovery rule is
an equitable exception that tolls the running of the statute of limitations until the plaintiff
knows, or in the exercise of reasonable care and diligence, should know that an injury has
been sustained.” Pero’s Steak & Spaghetti House v. Lee, 90 S.W.3d at 621.

       The discovery rule does not, however, toll the statute of limitations until the
       plaintiff actually knows that he or she has a cause of action. The plaintiff
       is deemed to have discovered the right of action when the plaintiff
       becomes aware of facts sufficient to put a reasonable person on notice
       that he or she has suffered an injury as a result of the defendant’s
       wrongful conduct. Shadrick v. Coker, 963 S.W.2d 726, 733 (Tenn.1998);
       Roe v. Jefferson, 875 S.W.2d 653, 657 (Tenn.1994).

Id. (emphasis added).

        Furthermore, the discovery rule does not allow the plaintiff to delay filing suit
until she knows the full extent of her damages, or the specific type of legal claim she has.
Redwing, 363 S.W.3d at 459. Constructive or “inquiry” notice occurs “when the plaintiff
has actual knowledge of facts sufficient to put a reasonable person on notice that he or
she has suffered an injury as a result of wrongful conduct.” Id. (internal quotation and
alteration omitted). In other words, “inquiry notice ‘charges a plaintiff with knowledge of

                                             -7-
those facts that a reasonable investigation would have disclosed.’” Id. (quoting Sherrill v.
Souder, 325 S.W.3d 584, 593 n.7 (Tenn. 2010)). Once the plaintiff “gains information
sufficient to alert a reasonable person of the need to investigate ‘the injury,’ the limitation
period begins to run.” Id.

       Mrs. Eldridge had actual knowledge that the house was damaged in a fire prior to
purchasing the home. She knew this through Mr. Savage’s statements to her and from her
own personal observations. As Mrs. Eldridge acknowledges in her sworn complaint and
in her affidavit filed with her response in opposition to Mr. Savage’s motion for summary
judgment, she observed “visible damage from the fire” to the home prior to purchasing
the house. She knew the kitchen cabinets were “caramel color due to being heat
scorched,” and she noticed a “burnt floor joist in the basement.” Mrs. Eldridge also
admitted that Mr. Savage told her and her husband that “the previous occupants set the
house on fire in three places in the front hallway.”

       In addition to having actual knowledge of fire damage to several places in the
house prior to purchasing it, including the main floor and basement, the record reveals
how easy it was for Mrs. Eldridge and her husband to subsequently discover the “extent”
of the damage. In her sworn complaint and affidavit Mrs. Eldridge states that she
discovered a significant amount of soot by merely “moving the refrigerator in the
kitchen” and “looking in the HVAC return.” For these reasons, as well as others that are
revealed in the record, Mrs. Eldridge was not only aware of facts sufficient to put a
reasonable person on notice that she had suffered an injury when she acquired the home
from Mr. Savage, but she also could have easily discovered additional facts sufficient to
put a reasonable person on notice that she had suffered an injury by acquiring the fire
damaged property from Mr. Savage.

                    B. Fraudulent Misrepresentation and Concealment

       The foregoing notwithstanding, Mrs. Eldridge contends she should be excused
from having to make any inquiries other than those she made prior to acquiring the
property due to Mr. Savage’s alleged fraudulent misrepresentations and concealment. We
do not agree.

       Tennessee courts have long recognized that the doctrine of fraudulent concealment
will also toll the running of a statute of limitations. Redwing, 363 S.W.3d at 462; Tenn.
Code Ann. § 29–26–116(a)(3). “The doctrine of fraudulent concealment is aligned with
the discovery rule. Under the fraudulent concealment doctrine, the statute of limitations is
tolled when the defendant has taken steps to prevent the plaintiff from discovering he [or
she] was injured.” Id. (internal citations omitted). In other words, fraudulent concealment
applies “to circumstances in which the defendant purposefully engages in conduct
intended to conceal the plaintiff’s injury from the plaintiff.” Id.


                                             -8-
       Generally, a plaintiff seeking to establish fraudulent concealment must prove that
the defendant took affirmative action to conceal the cause of action and that the plaintiff
could not have discovered the cause of action despite exercising reasonable diligence.
Vance v. Schulder, 547 S.W.2d 927, 930 (Tenn. 1977).2 A plaintiff invoking the
fraudulent concealment doctrine must allege and prove four elements:

        (1) that the defendant affirmatively concealed the plaintiff’s injury … or
        failed to disclose material facts regarding the injury . . . despite a duty to do
        so; (2) that the plaintiff could not have discovered the injury . . . despite
        reasonable care and diligence; (3) that the defendant knew that the plaintiff
        had been injured . . . ; and (4) that the defendant concealed material
        information from the plaintiff by withholding information . . . in order to
        exclude suspicion or prevent inquiry.”

Redwing, 363 S.W.3d at 462-63 (internal citations omitted).

       For the reasons discussed earlier, we have determined that Mrs. Eldridge cannot
establish the second essential element, that being that she could not have discovered that
the home had extensive fire damage despite reasonable care and diligence. We have
reached this conclusion based on the admissions by Mrs. Eldridge that reveal how easy it
was to discover a significant amount of soot by, for example, merely “moving the
refrigerator in the kitchen” and by “looking in the HVAC return.” As a result, we have
concluded that a reasonable jury could not legitimately resolve this fact in Mrs.
Eldridge’s favor. Byrd, 847 S.W.2d at 215.

       If it is established that the defendant fraudulently misrepresented or concealed a
material fact, the statute of limitations is tolled until the plaintiff discovers or, in the
exercise of reasonable diligence, should have discovered the defendant’s fraudulent
concealment or sufficient facts to put the plaintiff on actual or inquiry notice of her claim.
Redwing, 363 S.W.3d at 463. Thus, once the plaintiff discovers or should have
discovered the defendant’s fraudulent concealment or she discovers sufficient facts to put
the plaintiff on actual or inquiry notice of her claim, the original statute of limitations
begins to run anew, and the plaintiff must file her claim within the statutory limitations
period. Id.


        2
          A cause of action accrues “when the injury occurs or is discovered, or when in the exercise of
reasonable care and diligence, it should have been discovered,” McCroskey v. Bryant Air Conditioning
Co., 524 S.W.2d 487, 491 (Tenn. 1975), or “when the plaintiff knows or in the exercise of reasonable care
and diligence should know that an injury has been sustained as a result of wrongful or tortious conduct by
the defendant.” John Kohl & Co. P.C. v. Dearborn & Ewing, 977 S.W.2d 528, 532 (Tenn. 1998); see also
Shadrick v. Coker, 963 S.W.2d 726, 733 (Tenn. 1998); Stanbury v. Bacardi, 953 S.W.2d 671, 677 (Tenn.
1997).


                                                  -9-
       For purposes of our summary judgment analysis, we presume that Mr. Savage
made fraudulent misrepresentations and concealed material facts to hide the fact that the
home had extensive fire damage. This material fact notwithstanding, the record reveals
that Mrs. Eldridge should have and could have discovered Mr. Savage’s fraudulent
misrepresentations or concealment shortly after moving into the home in November of
1994, had she exercised reasonable diligence. Therefore, the statutes of limitations would
have only been tolled for a short period of time, a period wholly insufficient to save Mrs.
Eldridge’s claims from being time barred when this action was commenced in 2010.

                                    IN CONCLUSION

       The judgment of the trial court is affirmed, and this matter is remanded with costs
of appeal assessed against Alisa Leigh Eldridge.


                                                   ________________________________
                                                   FRANK G. CLEMENT JR., P.J., M.S.




                                          - 10 -
