Articles Posted in Fraud

A plaintiff’s fraud claim failed because she had no proof that her son’s body was cremated, rather than buried, as alleged in the complaint.

In Sessel v. N.J. Ford and Sons Funeral Home, Inc., No. W2024-00587-COA-R3-CV (Tenn. Ct. App. Dec. 15, 2025) (memorandum opinion), the plaintiff filed suit alleging that her son’s dead body had been cremated rather than buried as she instructed. According to the plaintiff, on the day of the son’s burial, the ground was too cold for a grave to be dug, so she was told he would be buried sometime thereafter. About a year after the funeral, she received an investigative report created by the medical examiner’s office that related to her son’s homicide. On a section labeled “cremation approved,” the form had been marked “yes.”

Based on this report, the plaintiff filed this suit against the funeral home and cemetery. Although the claims were hard to decipher, the Court of Appeals found that the complaint alleged breach of contract and fraud. The defendants filed a motion for summary judgment, citing testimony from the county’s Chief Medical Examiner who stated that this section of the report was meant to indicate that, if a family wished to cremate a body, it was permitted to do so because the forensic center had completed its investigation. He described it as “essentially pre-approval” for cremation, showing that if cremation were desired it would not hinder any investigation. He stated it was not authority for a funeral home to cremate a body.

A finding of fraudulent misrepresentation against a homebuilder was affirmed based on the builder’s misrepresentations about his qualifications.

In Ferguson v. M. Brown Construction, Inc., No. M2022-01637-COA-R3-CV (Tenn. Ct. App. Dec. 27, 2024) the plaintiff hired defendant Timothy Brown to build a custom home.  The defendant assured the plaintiff he had considerable experience and was qualified to do the job. The parties agreed that the house would be built for a specific price.

According to the plaintiff, he and his wife made payments and purchases at the direction of the defendant. The defendant unilaterally made changes to the building plan that altered the quality of the home. At some point, the defendant requested $30,000, which the plaintiff refused because he had paid/spent the full contract amount. The defendant then stopped working on the home.

Where defendants filed a counterclaim for intentional misrepresentation, but defendants’ allegations all centered around promises that plaintiffs had made to take certain actions in the future and defendants did not allege that plaintiffs had no present intention of performing when the promises were made, dismissal of the intentional misrepresentation claim was affirmed.

In Auxin, LLC v. DW Interests, LLC, No. M2022-01087-COA-R3-CV (Tenn. Ct. App. Jan. 25, 2023), plaintiffs sued defendants asserting various claims related to a real estate development contract. Defendants filed a counter-claim for breach of contract, but also included a claim for intentional misrepresentation. Among other rulings, the trial court dismissed defendants’ intentional misrepresentation claim, which was affirmed on appeal.

To successfully assert an intentional misrepresentation claim, a party must show that the tortfeasor “made a representation of an existing or past fact” that “was false when made.” (internal citation omitted). Here, defendants’ factual allegations all related to statements plaintiffs allegedly made about things they would do in the future. The Court wrote:

Where the attorney for an HOA wrote plaintiff landowner a letter informing him that the HOA considered him to be in violation of certain restrictions, judgment on the pleadings in favor of defendant attorney on plaintiff landowner’s negligent misrepresentation claim was affirmed because there was no allegation that the attorney was providing “information meant to guide [plaintiff] in a business transaction.”

In Burgess v. Bradford Hills HOA, No. M2020-01565-COA-R3-CV, 2023 WL 142392 (Tenn. Ct. App. Jan. 10, 2023), plaintiff owned property in a subdivision. Plaintiff and the HOA had a dispute regarding whether plaintiff had violated restrictions with certain signage and noise-making devices on his property.

Plaintiff filed a pro se suit against the HOA, and he eventually added a claim against the HOA’s attorney for negligent misrepresentation. The negligent misrepresentation claim was based on a letter sent by defendant attorney “reiterat[ing] that the HOA believed the conditions on [plaintiff’s] property violated the [restrictions] and warn[ing] that the HOA would take legal action if he continued to not comply with the rules.” The trial court granted defendant’s motion for judgment on the pleadings on the negligent misrepresentation claim, and the Court of Appeals affirmed.

Where plaintiffs claimed intentional misrepresentation based on a warranty deed stating that property being conveyed was free from encumbrances, but a bank held a lien on the property and had recorded a deed of trust eight years before the transaction, plaintiffs’ reliance on the warranty deed was not reasonable.

In Erwin v. Great River Road Supercross, LLC, No. W2019-01005-COA-R3-CV (Tenn. Ct. App. Dec. 1, 2020), plaintiffs purchased real property from defendants in 2008. The warranty deed conveying the property “contained a covenant that the real estate was unencumbered.” The parties eventually got into a dispute regarding personal property that was supposed to be included in the sale, which resulted in plaintiffs paying less than the agreed price and defendants declaring a default and instituting foreclosure proceedings. During the foreclosure, plaintiffs learned that a bank had a pre-existing lien on the property, meaning that the representation in the warranty deed that the property was unencumbered was false.

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Where a foundation repair company was sold a set of products and services to a plaintiff that did not actually work to stabilize her home, and where the company made many misrepresentations about the services and the processes used, the Court of Appeals affirmed an award to plaintiff for fraud.

In Maddox v. Olshan Foundation Repair and Waterproofing Co. of Nashville, L.P., No. M2018-00892-COA-R3-CV (Tenn. Ct. App. Sept. 18, 2019), plaintiff had purchased a home in 2003 that was built on a steep lot. When she began noticing water issues, cracking in the bottom level, and felt the house was tilting, she called defendant foundation repair company. Defendant sent Kevin Hayman to plaintiff’s home, who was identified as a “certified structural technician.” Hayman recommended that plaintiff utilize three systems to stabilize her home: a “Cable Lock system to support the front part of the home’s foundation with pillars,” a Wall Lock system that would anchor the back wall to the ground behind it, and a Water Lock system that would allegedly address the home’s water issues. Each of the systems came with a “lifetime warranty.”

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Where a homebuyer’s inspection of a property put them on notice that there were potential water issues in the garage before closing, the buyer could not later sustain a claim for fraud.

In Fulmer v. Follis, No. W2017-02469-COA-R3-CV (Tenn. Ct. App. Dec. 20, 2018), plaintiffs had previously purchased a home from defendants. On their disclosure forms, defendants had stated that they knew of no drainage issues, and that heavy rain had caused water to come into the garage one time, but that the issue had been repaired. While under contract but before closing, plaintiffs had a home inspection done, which noted “possible rainwater intrusion at the east wall in the garage,” grading issues that might cause drainage problems outside the garage, and a 1×8 board that had been installed for “some unknown reason” on the base of the east garage wall. After the inspection, plaintiffs and defendants continued to communicate through their realtors, with defendants sending pictures after a rain to show that no water had come into the garage, and plaintiffs asking about seeing behind the board. Defendants told plaintiffs that the board was intended to cover an area where they “did not like how the drywall and the garage floor came together” and was “purely cosmetic.” Plaintiffs ultimately did not do any further inspection and closed on the property, but did negotiate for defendants to pay $1,500 more in closing costs “due to the possible rainwater intrusion and grading issue.”

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Showing reliance in a fraud case does not require magic words during a plaintiff’s testimony. In Erwin v. Great River Road Supercross LLC, No. W2017-00150-COA-R3-CV (Tenn. Ct. App. Oct. 19, 2017), plaintiffs sued defendants based on a real estate purchase. Defendants had provided a warranty deed to plaintiffs that “specifically warranted against encumbrances,” but the property was actually subject to a $20,000 mortgage, which was not paid off at the time of closing. As part of this suit, plaintiffs alleged that this misrepresentation constituted fraud.

The trial court found that “[t]here was indeed an intentional misrepresentation made that the real property was unencumbered,” but it held that plaintiffs had not established the required element of reliance. The trial court found that “[o]ne Plaintiff testified that he did not rely on the unencumbered language in the deed when making the decision to purchase the property” and held that the claim failed.

On appeal, the Court of Appeals reversed this decision and remanded the intentional misrepresentation claim for further proceedings. The Court reviewed the plaintiff in question’s testimony, and noted that he stated that the warranty deed specifically said the property was unencumbered, that the property was in fact encumbered by a mortgage, and that he did not know about the mortgage until after the purchase had taken place and he received a foreclosure notice. The Court held: