In 2000, Joseph and Kimberli Davis bought a parcel of land in Tennessee for $135,000 and hired an architect to draw plans for the home they wanted to build on the plot, and a contractor to bid on the plans. The contractor estimated it would cost $600,000 to build the home.

The Davises applied for a home loan from SunTrust Bank to fund the construction of the property. SunTrust hired an appraiser to place a future value on the home post-construction, and provided the appraiser with a copy of the plans and specifications for the home, along with an appraisal order form stating the "sales price" of the home at $735,000.

The appraiser estimated the home’s future value at $735,000 and SunTrust funded a loan in the amount of $580,000 to the Davises, who funded the remaining costs of the construction with a separate home equity loan.

Construction was completed and the Davises moved into the property in 2003.

In 2004, the Davises applied for a home equity loan; in the course of that application, another appraiser estimated the home’s value at only $540,000. Just over a year after moving in, the Davises listed their home for sale at $676,900; months later, they accepted the first offer they received, for $660,000.

After selling the property, the Davises sued the appraiser, alleging intentional and negligent misrepresentation and violation of the Tennessee Consumer Protection Act (TCPA), on grounds that they had relied to their detriment on his appraisal value of $735,000 in electing to move forward with the construction of the home.

After extensive discovery, depositions and the like, the appraiser filed a motion for summary judgment. The trial court granted the summary judgment motions as to the intentional misrepresentation and TCPA claims, which were dismissed without further explanation.

The Davises eventually dismissed their negligent misrepresentation claim and appealed the grant of summary judgment.

On appeal, the lower court’s ruling and dismissal of the Davises’ case was affirmed.

In first evaluating the validity of the summary judgment grant as to the Davises’ intentional misrepresentation claim, the appellate court pointed out that to "sustain a cause of action for fraudulent misrepresentation, the homeowners must show: 1) the appraiser made a representation of an existing or past fact …" and five other required elements.

Because an appraisal is expressly defined in Tennessee law as an estimate or opinion of value, as opposed to a fact, the appraisal in this matter could not give rise to a successful intentional misrepresentation claim.

Similarly, because the appraisal in this matter was an estimate of the future value of a building which was not even constructed yet, it could not be considered an actionable statement of fact. Accordingly, the trial court’s dismissal of this claim was found to be proper.

On the Davises’ TCPA claim, the court first explained the relevant rule of law, under which "the TCPA provides a cause of action for any person who suffers an ascertainable loss of money as a result of an unfair or deceptive act or practice declared unlawful by the TCPA."

Pointing to the fact that the Davises had never even tried to sell their home at the appraised value, but listed it at a price significantly lower than the appraised value, and accepted the first offer they received, the appeals court ruled that the Davises could never, as a matter of law, show that their loss of money was a result of the appraisal.

For this reason, the trial court’s grant of summary judgment with respect to the TCPA claim was also upheld.

The lower court’s summary judgment ruling and dismissal of the Davises’ claims was affirmed.

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