§30.1 Generally

The Case: Brown v. Birman Managed Care, 42 S.W.3d 62 (Tenn. 2001).

The Basic Facts: Brown alleged that the defendant, her ex-husband's employer engaged in a conspiracy with her ex-husband to engage in fraud and avoid his proper child support obligation.

The Bottom Line:

• "The common law action for fraud may be stated as follows:

  When a party intentionally misrepresents a material fact or produces a false impression in order to mislead another or to obtain an undue advantage over him, there is a positive fraud. The representation must have been made with knowledge of its falsity and with a fraudulent intent. The representation must have been to an existing fact which is material and the plaintiff must have reasonably relied upon that misrepresentation to his injury.

  First Nat'l Bank v. Brooks Farms , 821 S.W.2d 925, 927 (Tenn. 1991) (quoting Haynes v. Cumberland Builders, Inc., 546 S.W.2d 228, 232 (Tenn. Ct. App. 1976)); see also Hodges v. S.C. Toof & Co., 833 S.W.2d 896, 901 (Tenn. 1992); Dobbs v. Guenther, 846 S.W.2d 270, 274 (Tenn. Ct. App. 1993). 'Tennessee courts have recognized that fraud by its nature is often difficult to prove and thus may be properly proved by wholly circumstantial evidence.' Edwards v. Travelers Ins. of Hartford, 563 F.2d 105, 112 (6th Cir. 1977) (citing Parrott v. Parrott, 48 Tenn. 681, 687 (1870))." 42 S.W.3d at 67-68.

Other Sources of Note: Black v. Black , 166 S.W.3d 699 (Tenn. 2005) (referencing the requirement that fraud must be pleaded with specificity); Hodges v. S.C. Toof & Co., 833 S.W.2d 896 (Tenn. 1992) ("A person acts fraudulently when (1) the person intentionally misrepresents an existing, material fact or produces a false impression, in order to mislead another or to obtain an undue advantage, and (2) another is injured because of reasonable reliance upon that misrepresentation."); Dozier v. Hawthorne Development Co., 262 S.W.2d 705, 711 (Tenn. Ct. App. 1953) (for concealment or non-disclosure to constitute fraud, the party charged with fraud must have knowledge of an existing fact or condition and a duty to disclose the fact or condition)..

Recent Cases: 

Stanfill v. Mountain , No. M2006-01072-SC-R11-CV, _____ S.W.3d _____, 2009 WL 4406059 (Tenn. Dec. 3, 2009) (reversing summary judgment on certain intentional and negligent misrepresentation claims); Sprintz-Hall Real Estate Partners, LLC v. Martin, No. M2008-02093-COA-R3-CV, 2009 WL 3126253 (Tenn. Ct. App. Sept. 29, 2009) (upholding jury verdict against tenant on intentional and negligent misrepresentation claims finding trial court properly instructed jury on ratification defense despite failure of landlord to plead the defense); Stafford v. Emberton, No. M2008-02250-COA-R3-CV, 2009 WL 2960391 (Tenn. Ct. App. Sept. 15, 2009) (affirming summary judgment on misrepresentation claims in sale of real property cases finding seller negated an essential element of the buyers' claims in affidavit denying knowledge of the alleged defects, and based on an "as is" provision agreed upon by the parties (except with regard to the fraudulent misrepresentation claim which the court found was not properly alleged in the complaint)); Ferrell v. Long, No. M2008-02232-COA-R3-CV, 2009 WL 1362321 (Tenn. Ct. App. May 14, 2009) (upholding dismissal of fraud claim based on statute of limitations); Homestead Group, LLC v. Bank of Tennessee, No. E2008-00350-COA-R3-CV, 2009 WL 482714 (Tenn. Ct. App. Feb. 26, 2009) (affirming trial court's ruling in favor of defendant on fraud claim finding no evidence in the record that the representation was false, finding the plaintiff failed to prove the representation was made with knowing or reckless disregard for the truth of the representation, and finding plaintiff's reliance on the representation unreasonable); Bielfeldt v. Templeton, No. M2008-01093-COA-R3-CV, 2009 WL 416002 (Tenn. Ct. App. Feb. 18, 2009) (finding in dispute over contract for sale of land that sellers never asserted they knew exact acreage of land at issue, sellers disclosed this fact from beginning of dealings, and finding no indication that sellers were trying to hide anything; also finding buyer voluntarily executed waiver of claim based on incorrect acreage); Shropshire v. Road, No. M2007-02593-COA-R3-CV, 2009 WL 230236 (Tenn. Ct. App. Jan. 30, 2009) (affirming jury verdict against seller of home for intentional misrepresentation); Goodman v. Jones, No. E2006-02678-COA-R3-CV, 2009 WL 103504 (Tenn. Ct. App. Jan. 12, 2009) (affirming judgment against buyers on intentional misrepresentation claim finding trial court did not err in failing to give jury instruction on common law claim; vacating judgment dismissing buyer's suit for breach of contract and negligent misrepresentation finding trial court erred in not charging jury on these causes of action); Butler v. Butler, No. W2007-01257-COA-R3-CV, 2008 WL 5396019 (Tenn. Ct. App. Dec. 23, 2008) (upholding trial court's finding of fraud); Davis v. McGuigan, No. M2007-02242-COA-R3-CV, 2008 WL 4254150 (Tenn. Ct. App. Sept. 10, 2008) (upholding summary judgment on fraudulent misrepresentation claim finding real estate appraisals generally cannot support such claims because they are not facts, but instead are opinions or estimates); Elchlepp v. Hatfield, No. E2007-01154-COA-R3-CV, 2008 WL 2925712 (Tenn. Ct. App. Jul. 30, 2008) (holding preponderance of the evidence standard applied where plaintiff does not seek rescission or reformation of a written instrument due to fraud); Rentea v. Rose, No. M2006-02076-COA-R3-CV, 2008 WL 1850911 (Tenn. Ct. App. Apr. 25, 2008) (finding no abuse of discretion by the trial court and affirming grant of summary judgment because plaintiff did not product sufficient evidence to establish claims of abuse of process, fraudulent concealment, or outrageous conduct); Jenkins v. Brown, No. M2005-02022-COA-R3-CV, 2007 WL 4372166 (Tenn. Ct. App. Dec. 14, 2007) (holding plaintiffs presented insufficient evidence to establish common-law fraud claim against contractor who built house).