IN THE COURT OF APPEALS OF TENNESSEE
AT JACKSON
April 20, 2004 Session
STEVEN R. OUZTS v. MICHAEL L. WOMACK, VICTORIA A. RAUB,
FRANK DONATO, REMAX-ELITE, STEVEN BOYSEN, CRYE-LEIKE,
INC., AND MCANALLY INSPECTION SERVICE, INC.
Appeal from the Chancery Court for Shelby County
No. CH-02-1430-1 Walter L. Evans, Chancellor
No. W2003-01502-COA-R3-CV - Filed October 4, 2004
This case involves alleged fraud in the sale of real estate. The sellers completed a residential
disclosure statement indicating that the subject property had no flooding problems. The sellers then
bargained to include language in the deed disavowing any previous representations concerning the
property’s condition. The buyer accepted these terms. After the buyer took possession, the property
flooded. The buyer filed suit against the sellers, alleging fraudulent concealment and
misrepresentation. The sellers filed a motion for summary judgment, which was granted. We
affirm, holding that the buyers are bound by the unambiguous terms of the contract for sale and the
deed.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court is Affirmed
HOLLY M. KIRBY , J., delivered the opinion of the Court, in which W. FRANK CRAWFORD , P.J., W.S.,
and DAVID R. FARMER , J., joined.
Stephen H. Biller, Memphis, for the appellant Steven R. Ouzts.
Richard Glassman and Tameka Turner-Perry, Memphis, for the appellees Michael L. Womack and
Victoria A. Raub.
OPINION
In April 2000, Defendants/Appellees Michael L. Womack (“Womack”) and Victoria A. Raub
(“Raub”), husband and wife, listed their residence at 516 St. Nick Drive, Memphis, Tennessee (“the
Property”) for sale. At that time, Womack and Raub completed a residential disclosure statement,
which indicated in part that the property was not subject to flooding. Plaintiff/Appellant Steven R.
Ouzts (“Ouzts”) became interested in purchasing the Property, but was concerned that it might be
subject to flooding. His real estate agent inquired about flooding, and the sellers’ agent responded
that they had not experienced any flooding problems.
Ouzts made an offer to purchase the Property. Womack and Raub counter-offered, adding
the condition that after closing they would “have no further obligation or responsibility to [Ouzts]
for the condition of the Property” and that the deed would contain language to that effect. The
counter-offer recited the language to appear in the deed:
Notwithstanding anything to the contrary contained in this deed, it is understood and
agreed that the Property is being conveyed without any representation or warranty of
any kind by Grantor except as expressly set forth herein. Grantor has not made and
does not hereby make (except as expressly set forth herein) any representations or
warranties of any kind or character whatsoever, express or implied, with respect to
the property, its condition (environmental or otherwise), uses or fitness for any
particular purpose, and Grantor hereby disclaims and renounces any such
representation or warranty and by Grantee accepting the Property, Grantor is forever
discharged therefrom.
The counter-offer noted that these provisions “shall survive the closing and be binding upon the
parties, their successors, successors in title, heirs and assigns.” Ouzts reviewed the counter-offer and
accepted it on June 14, 2000. On July 28, 2000, Womack and Raub executed a Special Warranty
Deed containing the exculpatory language set forth in the contract for sale.
On August 12, 2002, the Property purchased from Womack and Raub was damaged by
significant flooding. On July 26, 2002, Ouzts filed a lawsuit against Womack and Raub, as well as
the listing agent and agency for the Property.1 In the lawsuit, Ouzts asserted that Womack and Raub
were aware that the Property was subject to flooding, but fraudulently concealed this fact and made
material misrepresentations by failing to disclose the flooding problem on the residential disclosure
statement. Ouzts sought rescission of the contract, as well as compensatory and punitive damages.
Womack and Raub filed motions for summary judgment, arguing that the exculpatory
language of the contract and deed shielded them from a lawsuit arising out of the condition of the
Property, and additionally that the statute of limitations had run on Ouzts’ claim. The trial court
granted the motion for summary judgment, noting, “there is specific language in the warranty deed
which is a part of the transferring document, which clearly states that the defendants did not make
any representations as to any of the conditions [of] which the plaintiff is complaining.” The trial
court concluded, “[I]t doesn’t appear as though the Court can perceive any basis upon which the
plaintiff could succeed in an action against these defendants.” The trial court did not rule on the
statute of limitations defense. From that order, Ouzts now appeals.2
1
Ouzts later amended the complaint to add his own real estate agent, Steven Boysen, and his agency, Crye-
Leike, Inc., and M cAnally Inspection Service, Inc.
2
The trial court made the judgment final as to W omack and Raub under Tennessee Rule of Civil Procedure
54.02.
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On appeal, Ouzts argues that there are genuine issues of material fact as to whether Womack
and Raub knew that the Property had a flooding problem. Ouzts asserts that this disputed fact is
material because the representations in the residential disclosure statement and by the sellers’ agent
that the Property was not subject to flooding induced him into accepting the exculpatory language
in the contract for sale and the Special Warranty Deed. Therefore, Ouzts maintains that the trial
court erred in granting the motion for summary judgment.
A motion for summary judgment should be granted when the movant demonstrates that there
are no genuine issues of material fact and that the moving party is entitled to judgment as a matter
of law. Tenn. R. Civ. P. 56.04. Summary judgment is only appropriate when the facts and the legal
conclusions drawn from the facts reasonably permit only one conclusion. Carvell v. Bottoms, 900
S.W.2d 23, 26 (Tenn. 1995). Since only questions of law are involved, there is no presumption of
correctness regarding a trial court’s grant of summary judgment. Bain v. Wells, 936 S.W.2d 618,
622 (Tenn. 1997). Therefore, our review of the trial court’s grant of summary judgment is de novo
on the record before this Court. Warren v. Estate of Kirk, 954 S.W.2d 722, 723 (Tenn. 1997).
It is well settled that “exculpatory clauses are valid in Tennessee and are not against the
public policy of this state.” Burks v. Belz-Wilson Props., 958 S.W.2d 773, 776 (Tenn. Ct. App.
1997). Under the common law of contracts, such clauses must be interpreted and enforced according
to their plain terms. Warren v. Metropolitan Gov’t of Nashville & Davidson County, 955 S.W.2d
618, 622 (Tenn. App. 1997). The application of rules of construction of contracts is not necessary
“[w]hen clear contract language reveals the intent of the parties.” Id. Contract language is
considered unambiguous unless “it is of uncertain meaning and may fairly be understood in more
ways than one.” Id. When a contract is plain and unambiguous, its meaning is purely a question of
law. Id.
It is undisputed that the question of whether to insert this language was a significant issue
in the negotiations on the contract for sale. In this case, the language in the Special Warranty Deed
is clear and unambiguous: “Grantor has not made and does not hereby make (except as expressly set
forth herein) any representations or warranties of any kind . . . with respect to the property, its
condition (environmental or otherwise), uses or fitness for any particular purpose.” Indeed, the
language in the Special Warranty Deed goes a step further, disclaiming and renouncing any previous
representations made by Womack and Raub: “Grantor hereby disclaims and renounces any such
representation or warranty and by Grantee accepting the Property, Grantor is forever discharged
therefrom.” It was a major component of the contract negotiations. Under these circumstances,
Ouzts’ assertion that he based his acceptance of the exculpatory language upon representations made
by Womack and Raub is unreasonable. Thus, even assuming that Womack and Raub knowingly
misrepresented the Property’s susceptibility to flooding, this would not be a material fact. Because
there are no genuine issues of material fact, the trial court’s grant of summary judgment to Womack
and Raub was not error.
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In this appeal, Womack and Raub seek an award of sanctions against Ouzts and his legal
counsel under Rule 11 of the Tennessee Rules of Civil Procedure for a frivolous appeal. We decline
to do so.
The decision of the trial court is affirmed. Costs of this appeal are taxed against the appellant
Steven R. Ouzts and his surety, for which execution may issue, if necessary.
___________________________________
HOLLY M. KIRBY, JUDGE
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