Picture of John Day

§30.2A Certain Opinions Can Be Basis for Fraudulent Misrepresentation Claim

The Case: Davis v. McGuigan, 312 S.W.3d 149 (Tenn. 2010).

The Basic Facts:  Plaintiff homeowners sued Defendant appraiser alleging that he intentionally and negligently over-stated the value of their home.  The appraisal was done based on construction drawings because the home had not yet been built. Defendant argued that his appraisal was an opinion, not a representation of fact, and an opinion cannot provide a basis for a claim.

The Bottom Line:

  • “The Davises must prove six elements to establish their claim of intentional misrepresentation at trial: (1) that Mr. McGuigan made a representation of an existing or past fact; (2) that the representation was false when it was made; (3) that the representation involved a material fact; (4) that Mr. McGuigan made the representation recklessly, with knowledge that it was false, or without belief that the representation was true; (5) that the Davises reasonably relied on the representation; and (6) that they were damaged by relying on the representation. Walker v. Sunrise Pontiac-GMC Truck, Inc., 249 S.W.3d 301, 311 (Tenn. 2008) (citations omitted).”  312 S.W.3d at 154.
  • “Regarding the first element, Mr. McGuigan contends that his appraisal was an opinion, not a representation of fact, and that an opinion cannot provide a basis for the Davises to show at trial that Mr. McGuigan made a representation of existing or past fact.” Id.
  • “In Sunderhaus v. Perel & Lowenstein, this Court stated that the general rule is that ‘ordinarily representations of value made by one seeking to dispose of property commercially are to be regarded as expressions of opinion...not constituting a basis of fraud.’ 215 Tenn. 619, 388 S.W.2d 140, 142 (1965). We observed, however, ‘a number of exceptions to this general rule.’ Id.  ‘Representations as to market price or market value are not mere statements of opinion, but are representations of fact which, if false, will support an action for fraud or deceit.’ Id. (quoting 23 Am. Jur. Fraud and Deceit § 62). We also stated,

Wherever a party states a matter, which might otherwise be only an opinion, and does not state it as the mere expression of his own opinion, but affirms it as an existing fact material to the transaction, so that the other party may reasonably treat it as a fact, and rely and act upon it as such, then the statement clearly becomes an affirmation of fact within the meaning of the general rule, and may be a fraudulent misrepresentation.


Id. at 142-43 (quoting 3 Pomeroy’s Equity Jurisprudence § 878b (5th ed.1941)).  ‘The statements which most frequently come within this branch of the rule are those concerning value.’ Id. at 143 (quoting 3 Pomeroy’s Equity Jurisprudence § 878b (5th ed.1941)).”  Id. at 154-55.

  • “The Restatement (Second) of Torts also states that an opinion may give rise to an intentional misrepresentation claim. Restatement (Second) of Torts § 525 (1977). It further explains that the form of an opinion may control whether it is a representation.  ‘I believe that there are ten acres here,’ is a different statement...from ‘The area of this land is ten acres.’  The one conveys an expression of some doubt while the other leaves no room for it.’ Restatement (Second) of Torts § 538A cmt.  c  (1977).  The speaker’s relationship to the recipient also is important.  A person may doubt a seller’s statement about the value of the property being sold while the same person may accept as true a disinterested expert’s opinion of value about the same property. See Restatement (Second) of Torts § 539 cmt. c (1977). Indeed, section 543 of the Restatement (Second) of Torts states, ‘The recipient of a fraudulent misrepresentation of opinion is justified in relying upon it if the opinion is that of a person whom the recipient reasonably believes to be disinterested and if the fact that such person holds the opinion is material.’”  Id. at 155 (footnote omitted).
  • “We therefore hold that an opinion of value may provide the basis for a fraudulent misrepresentation claim and overrule the holding of the Court of Appeals that Mr. McGuigan’s appraisal is not actionable because it is an opinion of value.”  Id.

After an accident, many injury victims and their families want more information on the accident and their legal rights. Consequently, many of them have found their way to these pages. While we are happy you are here, please understand Day on Torts: Leading Cases in Tennessee Tort Law was written to be a quick, invaluable reference for Tennessee tort lawyers. While the book provides the leading case for more than 300 tort law subjects and thousands of related case citations, it is not a substitute for personalized legal advice from a qualified lawyer.

Rather than researching these legal issues alone, we urge you to contact one of our award-winning lawyers who can sit down with you, review your case, answer your questions and clearly explain your rights and your options in a no-cost, no-obligation consultation. Our experienced attorneys handle all personal injury and wrongful death cases on a contingency basis, so we only get paid if we win. If for any reason you are unable to come to our office, we will gladly come to you.

To schedule an appointment, contact us online or call us at 615-742-4880 or toll-free at 866-812-8787.

The foregoing is an excerpt from Day on Torts: Leading Cases in Tennessee Tort Law, published by John A. Day, Civil Trial Specialist, Fellow in the American College of Trial Lawyers, recipient of Best Lawyers in America recognition, Martindale-Hubbell AV® Preeminent™ rated attorney, and Top 100 Tennessee Mid-South Super Lawyers designee. Read John’s full bio here.

To order a copy of the book, visit www.dayontortsbook.com. John also blogs regularly on key issues for tort lawyers. To subscribe to the Day on Torts blog, visit www.dayontorts.com.

Client Reviews
Everything was great. You guys are a great representative. I was satisfied with everything. Truly appreciate John Day and his hard-working staff.
We thought that you did an excellent job in representing us in our lawsuit. We would recommend you to anyone. Mitch Deese
The Law Offices of John Day is, without a doubt, the best in Nashville! They treated me with the utmost respect and tended to my every need. No question went unanswered. I was always kept informed of every step in the process. I received phenomenal results; I couldn't ask for more. I would definitely hire the Law Offices of John Day again. Anthony Santiago
I would definitely recommend to anyone to hire John Day's law firm because everyone was helpful, made everything clear and got the job done. I am satisfied with how my case was handled. June Keomahavong
It's been a long battle but this firm has been very efficient and has done a remarkable job for me! I highly recommend them to anyone needing legal assistance. Everyone has always been very kind and kept me informed of all actions promptly. Linda Bush
I had a great experience with the Law Offices of John Day. The staff was very accommodating, and my phone calls/emails were always responded to in a timely manner. They made the entire process very easy and stress-free for me, and I had confidence that my case was in good hands. I am very happy with the results, and I highly recommend! Casey Hutchinson