Lorenta Hogue v. P&C Investments, Inc. ( 2022 )

11/23/2022
IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
August 2, 2022 Session
LORENTA HOGUE V. P&C INVESTMENTS, INC. ET AL.
Appeal from the Chancery Court for Davidson County
No. 19-0635-II Anne C. Martin, Chancellor
No. M2021-01335-COA-R3-CV
This is an appeal from a jury verdict holding a real estate agent liable for common law
negligence, intentional misrepresentation and fraud, negligent misrepresentation, and
violation of the Tennessee Real Estate Broker License Act for his failure to disclose
flooding and water intrusion issues at a home he had listed for sale. The jury awarded the
plaintiff, a first-time home buyer, compensatory and punitive damages. The real estate
agent appeals the jury’s verdict holding him liable for intentional misrepresentation and
fraud, the admission of certain expert testimony, the admission of opposing counsel’s
alleged prejudicial statements during closing argument, the amount of compensatory
damages, and the award of and amount of punitive damages. Finding that the trial court
failed to follow the appropriate procedures in reviewing the jury’s award of punitive
damages, we vacate the award of punitive damages and remand the case for further
proceedings. In all other respects, the judgment of the trial court is affirmed.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed
in Part and Vacated and Remanded in Part
ANDY D. BENNETT, J., delivered the opinion of the Court, in which FRANK G. CLEMENT,
JR., P.J., M.S., and THOMAS R. FRIERSON, II, J., joined.
George R. Fusner, Jr., Brentwood, Tennessee, for the appellant, Jason Catalogne.
Charles Ronald Lux and Edward Alexander Herbert, Nashville, Tennessee, for the
appellee, Lorenta Hogue.
OPINION
FACTUAL AND PROCEDURAL BACKGROUND
P&C Investments, LLC (“P&C”), a real estate company operated by Selena
Catalogne, purchased a home located at 2509 Old Matthews Road in Nashville, Tennessee
(“the property”) in August 2016. P&C improved the property, including, among other
things, renovating the basement and installing water remediation systems. Jason Catalogne
(“Mr. Catalogne”), Selena Catalogne’s husband, was involved in the process of making
improvements and renovations to the property. Mr. Catalogne also represented P&C
Investments as its real estate agent when P&C desired to list the property for sale. During
P&C’s ownership of the property, there were instances of water intrusion into the garage
and basement, and Mr. Catalogne had conversations with Metro Nashville Water Services
(“Metro Water”) about the water issues at the property. P&C briefly rented out the home
through a corporate housing service but then decided to sell the home in the spring of 2018.
The real estate transaction following P&C’s renovation and listing of the property is the
subject of this appeal.
Lorenta Hogue, a first-time home buyer, became interested in the property and
wished to see it. Ms. Hogue’s real estate agent was her sister, Jennifer Garth, who arranged
for Mr. Catalogne to show Ms. Hogue the property while Ms. Garth was out of town. Ms.
Hogue and her father, John Simpson, toured the property together. Ms. Hogue described
the showing of the property as follows:
Mr. Catalogne was there and he led us through the front. We went
through the front door and, you know, walked around, looked at the house
upstairs. Mr. Catalogne was pretty much right there every step of the way as
we were looking at the house.
....
And then we proceeded to go downstairs with Mr. Catalogne. . . . And
when I came downstairs, I did kind of notice a faint kind of moisture kind of
scent like of a -- kind of like a wet dog type odor, which that didn’t really
concern me much, because the house that I grew up in, we had a basement.
So, it was always kind of a musty smell. So, that didn’t really, you know,
bother me about that.
But as I kept going around the basement, the next thing I saw was that
the shoe molding was missing at the bottom of the -- this, the shoe molding,
it was missing around the whole basement. And I said this is a newly
renovated house. I said why wouldn’t the owner, you know, the seller have
put the shoe molding on. And Mr. Catalogne, he was -- we were kind of
standing over in this area, and he had said to me, oh, that, you know, I’m
sure, you know, the owner or the seller would be willing to put those on, you
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just need to tell your agent to put that -- you know, if you decide to put a
contract on this house, just tell your agent to do that.
So, I said okay. I went and I looked at the garage. And then we -- when
we got over to the door, Mr. Catalogne did -- he opened that door up and he
said, you know, here is the sump pump, I put a new one in. And I didn’t think
anything about the sump pump being there other than, you know, like he had
kind of expressed about other things in the house, you know, he put
something in like as an upgrade or something.
So then we proceeded to go to the backyard. I noticed there were --
now, I know it’s a French drain, but a drain back there. He called it a French
drain. And he said, you know, this is part of what helps to take the water out
from the parking area back there. And that’s basically all that we kind of
discussed.
In contrast, Mr. Catalogne testified that while standing at the rear of the home in the parking
area, Mr. Simpson asked about the drainage ditch, and Mr. Catalogne said to Mr. Simpson
and Ms. Hogue, who he believed was within earshot, that, “This place had three water
intrusions but we installed this; and after we installed it there hasn’t been any[]more
problems.”
Ms. Hogue submitted an offer to purchase the property. P&C and Ms. Hogue
engaged in negotiations and eventually entered into a contract for the sale of the home on
May 8, 2018. P&C prepared a Tennessee Residential Property Condition Exemption
Notification form (the “Exemption Notice). The Exemption Notice includes the following
provision:
Buyer is advised that no representation or warranties, express or implied, as
to the condition of the property and its improvements, are being offered by
Seller except in the case where transfer involves the first sale of a dwelling
in which builder offers a written warranty and those required by seller
pursuant to Tenn. Code Ann. §§ 66-5-212 and 66-5-213. Furthermore, the
Buyer should make or have made on the Buyer’s behalf a thorough and
diligent inspection of the property.
Ms. Hogue acknowledged receipt of the Exemption Notice on May 15, 2018. In addition,
Mr. Catalogne executed a Personal Interest Disclosure and Consent form which indicated
that an immediate family member was the person selling the Property. Ms. Hogue also
acknowledged the receipt of this disclosure on May 15, 2018.
Ms. Hogue then had a home inspection and a termite inspection completed on the
property. The home inspection revealed minor issues, but it did not reveal any concerns
regarding water intrusion or standing water in the downstairs area. Soon thereafter, the
parties agreed upon a Repair/Replacement Amendment listing items that required repair.
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On June 5 and 6, 2018, the parties executed an Amendment to Purchase and Sale
Agreement stating: “1) The purchase price will be $243,000[, and] 2) Seller has satisfied
all of the repair requests as agreed to in the Repair Amendment. House is sold AS-IS.”
Ms. Hogue and her fiancé had a second walk through at the property during which Mr.
Catalogne provided her with additional information about the sump pump and the French
drain. The parties closed on the property on July 3, 2018, and Ms. Hogue took possession.
About one month after purchase, Ms. Hogue began to repeatedly experience water
intrusion in her garage and basement. Ms. Hogue filed a Complaint against P&C and Mr.
Catalogne (collectively, “defendants”) alleging that the defendants did not disclose the
history of water intrusion at the property despite their knowledge and duty to disclose the
same. Ms. Hogue asserted causes of action for negligent misrepresentation, unjust
enrichment, negligence, intentional misrepresentation and fraud, and violation of the
Tennessee Real Estate Broker License. Defendants moved for summary judgment, and the
trial court granted summary judgment on all counts against P&C and dismissed P&C from
the case.1 The court granted summary judgment on the unjust enrichment claim against
Mr. Catalogne but declined to dismiss the other counts against him, finding disputed
material facts existed on each cause of action. Mr. Catalogne filed a motion for election of
remedies seeking to require Ms. Hogue to elect damages of either 1) cost to repair the
property or 2) diminution in value of the property pre-trial. The trial court denied Mr.
Catalogne’s request but held that, Ms. Hogue “cannot recover[] for both elements. The
Jury Instructions and Verdict Form will contain instructions for the jury to choose one
measure of damages upon which a judgment [may be] entered.”
The case proceeded to a jury trial, at which the following six witnesses testified:
Ms. Hogue; Ms. Garth; John Simpson; John Michael Corn (environmental consultant and
engineer with expertise in “ground and surface water” who testified as Ms. Hogue’s
expert); Barbara “Bobbie” Noreen (a real estate broker with fifty years of experience who
testified as Ms. Hogue’s expert on the real estate “professional standard of conduct and
ethics and marketability and evaluation of real estate for sale”); and Mr. Catalogne. Mr.
Catalogne’s attorney made a motion for directed verdict at the close of Ms. Hogue’s proof,
which the trial court denied. Mr. Catalogne proceeded to put on his proof, but he did not
renew his motion for directed verdict at the close of the evidence. The jury returned a
verdict in favor of Ms. Hogue and awarded her $243,000 in compensatory damages (the
value of the purchase price of the home). The court proceeded to the second phase of trial
and conducted a hearing on the amount of punitive damages. The jury deliberated and
awarded Ms. Hogue $250,000 in punitive damages.
On August 26, 2021, Mr. Catalogne filed a Motion for Judgment Notwithstanding
the Verdict or in the Alternative for a New Trial and a Motion to Alter or Amend the
1
P&C is not participating in this appeal.
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Judgment by Granting Remittitur. On August 28, 2021, Ms. Hogue filed a Motion for
Discretionary Costs and Pre-Judgment and Post-Judgment Interest. The trial court granted
Ms. Hogue an award of discretionary costs in the amount of $1,251.15 and denied any pre-
judgment interest. The court summarily denied Mr. Catalogne’s post-trial motions. Mr.
Catalogne appeals asserting the following issues, as articulated by him:
1) Whether John Corn should not have been admitted as an expert in this
case because Mr. Corn was not qualified to testify on the subject matter;
and because Mr. Corn’s testimony was unreliable.
2) Whether Plaintiff’s claims for intentional misrepresentation and fraud
should have failed?
3) Whether Plaintiff’s counsel made a number of prejudicial statements
during closing arguments that affected the outcome of the trial and
warrant[ed] a new trial?
4) Whether the award of damages was excessive because Plaintiff failed to
mitigate any damages?
5) Whether the award of compensatory damages was excessive and contrary
to the law?
6) Whether Plaintiff should have been awarded punitive damages and
whether said award was excessive and contrary to law?
STANDARD OF REVIEW
Tennessee Rule of Appellate Procedure 13(d) narrowly limits the role of the
appellate courts in reviewing a jury’s verdict and requires that a jury’s findings of fact “be
set aside only if there is no material evidence to support the verdict.” Appellate courts are
not empowered “to weigh the evidence, to determine the credibility of the witnesses, or to
resolve conflicts in the testimony.” Duran v. Hyundai Motor Am., Inc., 271 S.W.3d 178,
210 (Tenn. Ct. App. 2008). When reviewing the record to determine whether it contains
material evidence to support a jury’s verdict, “the appellate court must review the record
and ‘take the strongest legitimate view of all the evidence in favor of the verdict, assume
the truth of all evidence that supports the verdict, allow all reasonable inferences to sustain
the verdict, and discard all countervailing evidence.’” Borne v. Celadon Trucking Servs.,
Inc., 532 S.W.3d 274, 298 (Tenn. 2017) (quoting Akers v. Prime Succession of Tenn., Inc.,
387 S.W.3d 495, 501 (Tenn. 2012)). “The process of ascertaining whether evidentiary
support exists for a jury’s verdict is very deferential toward the verdict.” Duran, 271
S.W.3d at 204 (citing Barrett v. Vann, No. E2006-01283-COA-R3-CV, 2007 WL 2438025,
at *11 (Tenn. Ct. App. Aug. 29, 2007); Ballard v. Serodino, Inc., No. E2004-02656-COA-
R3-CV, 2005 WL 2860279, at *3 (Tenn. Ct. App. Oct. 31, 2005)). When an appellant
requests this Court to review the evidentiary foundation for a jury’s verdict, we must:
[K]eep in mind that the Constitution of Tennessee assigns this task to the
jury. Smith v. Sloan, 225 S.W.2d 539, 541 (Tenn. 1949); Jackson v. B.
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Lowenstein & Bros., Inc., 136 S.W.2d 495, 496 (Tenn. 1940). Appellate
courts are not a jury of three with the prerogative to re-weigh the
evidence, Whaley v. Rheem Mfg. Co., 900 S.W.2d 296, 300 (Tenn. Ct. App.
1995); Lowe v. Preferred Truck Leasing, Inc., 528 S.W.2d 38, 41 (Tenn. Ct.
App. 1975), or to determine where the “truth” lies. D.M. Rose & Co. v.
Snyder, 206 S.W.2d 897, 901 (Tenn. 1947); Davis v. Wilson, 522 S.W.2d
872, 875 (Tenn. Ct. App. 1974). Nor are they empowered to substitute their
judgment for the jury’s, Grissom v. Modine Mfg. Co., 581 S.W.2d 651, 652
(Tenn. Ct. App. 1978), even if they conclude that the evidence might well
have supported a different conclusion, or that the jury did not weigh the
evidence well or that they would have reached a different conclusion had
they been members of the jury.
Id. at 204-05 (footnotes omitted). In sum, where there is material evidence to support the
jury’s verdict, we are bound to affirm it.
ANALYSIS
A. Intentional Misrepresentation and Fraud
As we understand his argument, Mr. Catalogne asserts that the evidence is not
legally sufficient to support a finding that Ms. Hogue acted with “due diligence,” and
therefore, her claim for intentional misrepresentation and fraud “should have failed.”
Although not specifically phrased as such, we surmise that Mr. Catalogne is asserting on
appeal that the trial court committed reversible error in denying his motion for directed
verdict on Ms. Hogue’s intentional misrepresentation and fraud claims.2 In response, Ms.
Hogue asserts that Mr. Catalogne waived his ability to challenge the sufficiency of the
evidence by failing to renew his Tenn. R. Civ. P. 50 motion for directed verdict at the close
of all proof, and in any event, there is material evidence to support the jury’s verdict.
“A motion for directed verdict provides a vehicle for deciding questions of law; the
question presented is whether the plaintiff has presented sufficient evidence to create an
issue of fact for the jury to decide.” Brown v. Christian Bros. Univ., 428 S.W.3d 38, 49
(Tenn. Ct. App. Aug. 5, 2013) (citing Burton v. Warren Farmers Coop., 129 S.W.3d 513,
520 (Tenn. Ct. App. 2002)). Phrased another way, “[t]he question of whether evidence is
sufficient to support a jury verdict is tested by a motion for a directed verdict.” Steele v.
Columbia/HCA Health Care Corp., No. W2001-01692-COA-R3-CV, 2002 WL 1000181,
at *3 (Tenn. Ct. App. May 13, 2002). When ruling on a motion for directed verdict, the
trial and appellate courts:
2
Indeed, the substance of his briefing on appeal is recycled nearly verbatim from his post-trial motion
for judgment notwithstanding the verdict.
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must take the strongest legitimate view of the evidence in favor of the non-
moving party. In other words, the court must remove any conflict in the
evidence by construing it in the light most favorable to the non-movant and
discarding all countervailing evidence. The court may grant the motion only
if, after assessing the evidence according to the foregoing standards, it
determines that reasonable minds could not differ as to the conclusions to be
drawn from the evidence. Sauls v. Evans, 635 S.W.2d 377 (Tenn.
1982); Holmes v. Wilson, 551 S.W.2d 682 (Tenn. 1977). If there is any doubt
as to the proper conclusions to be drawn from the evidence, the motion must
be denied. Crosslin v. Alsup, 594 S.W.2d 379 (Tenn. 1980).
Hatfield v. Allenbrooke Nursing & Rehab. Ctr., LLC, No. W2017-00957-COA-R3-CV,
2018 WL 3740565, at *28 (Tenn. Ct. App. Aug. 6, 2018) (quoting Eaton v. McLain, 891
S.W.2d 587, 590 (Tenn. 1994)). Because Mr. Catalogne has challenged the sufficiency of
the evidence with respect to the jury’s finding on the claims for intentional
misrepresentation and fraud, we continue by examining his issues within the framework of
this standard of review.
Regarding the timing of presenting a Tenn. R. Civ. P. 50 motion for directed verdict
and the ability to preserve the issue for appeal, Tenn. R. Civ. P. 50.02 provides, in relevant
part:
Whenever a motion for a directed verdict made at the close of all the evidence
is denied or for any reason is not granted, the court is deemed to have
submitted the action to the jury subject to a later determination of the legal
questions raised by the motion. Within 30 days after the entry of judgment a
party who has moved for a directed verdict may move to have the verdict and
any judgment entered thereon set aside and to have judgment entered in
accordance with the party’s motion for a directed verdict; or if a verdict was
not returned, such party, within 30 days after the jury has been discharged,
may move for a judgment in accordance with such party’s motion for a
directed verdict. A motion for a new trial may be joined with this motion, or
a new trial may be prayed for in the alternative.
(emphasis added). This Court has held that a motion for directed verdict “must be made at
the conclusion of all the proof in order for it to be considered by the trial court on a post-
trial motion and by this court on appeal.” Potter v. Tucker, 688 S.W.2d 833, 835 (Tenn.
Ct. App. 1985); see also McLemore ex rel. McLemore v. Elizabethton Med. Invrs., Ltd.
P’ship, 389 S.W.3d 764, 778 (Tenn. Ct. App. 2012) (“For this Court to review the
sufficiency of the evidence on appeal, a motion for a directed verdict must have been made
at the conclusion of all of the proof and renewed in a post judgment motion following the
jury’s verdict.”) (citing Steele, 2002 WL 1000181, at *3)); Robert Banks, Jr. & June F.
Entman, TENNESSEE CIVIL PROCEDURE § 12-1[c] (“[A] party must first move for directed
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verdict before the case is submitted to the jury in order to be able to obtain a post-verdict
entry of a favorable judgment on the basis of the legal insufficiency of the prevailing
opponent’s evidence.”).
In this case, there is no dispute that Mr. Catalogne moved for a directed verdict at
the close of Ms. Hogue’s proof, and the trial court denied his motion. Mr. Catalogne also
concedes that his trial counsel went forward with additional proof and, at the close of the
case, he did not move for or renew his motion for a directed verdict. In his reply brief, Mr.
Catalogne acknowledges that Tenn. R. Civ. P. 50.02 requires a motion for directed verdict
to be raised at the close of all the proof; however, he urges this Court to “follow the modern
trend taken in federal courts, which no longer requires renewal of a motion for directed
verdict at the close of all the proof.” Mr. Catalogne cites to the advisory comments of Fed.
R. Civ. P. 50(b) which states that the federal rule was amended in 2006 to:
permit renewal of any Rule 50(a) motion for judgment as a matter of law,
deleting the requirement that a motion be made at the close of all the evidence
....
This change responds to many decisions that have begun to move
away from requiring a motion for judgment as a matter of law at the literal
close of all the evidence. Although the requirement has been clearly
established for several decades, lawyers continue to overlook it. The courts
are slowly working away from the formal requirement. The amendment
establishes the functional approach that courts have been unable to reach
under the present rule and makes practice more consistent and predictable.
Many judges expressly invite motions at the close of all the evidence.
The amendment is not intended to discourage this useful practice.
(emphasis added). As explained below, and in keeping with prior caselaw on this issue,
we decline to adopt the approach Mr. Catalogne suggests.
This Court confronted the issue of waiver of the right to appeal a trial court’s ruling
on a motion for directed verdict in the case of Parker v. Epstein Enterprises, LLC, No.
W2019-00311-COA-R3-CV, 2020 WL 2731234, at *12 (Tenn. Ct. App. May 26, 2020).
The appeal in Parker concerned a jury’s verdict finding the owner of an apartment complex
liable in a vicious dog bite case. Parker, 2020 WL 2731234 at *1-8. At trial, the
defendants moved for directed verdict at the close of plaintiff’s proof, but they failed to
renew the motion for directed verdict at the close of all evidence. Id. at *12. On appeal,
the defendants urged this Court to reverse the trial court’s ruling on their motion for
directed verdict for several reasons, including that the evidence was not sufficient to show
that the owner of the apartment complex had knowledge of the dogs’ vicious tendencies.
Id. at *11. In response, the plaintiffs argued that the defendant waived the right to appeal
the trial court’s denial of the motion for directed verdict because, although the defendants
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moved for directed verdict at the close of the plaintiff’s proof, “they did not renew their
motion at the close of all proof.” Id. at *12. Just as Mr. Catalogne has requested in this
appeal, the defendants in Parker asked this Court to follow the “‘modern trend’” and
disregard the requirement that the Tenn. R. Civ. P. 50 motion be made at the close of all
the evidence. Id. This Court sided with plaintiffs and held the issue was waived, stating:
As the Tennessee Supreme Court explained in State v. Thompson, 549S.W.2d 943, 945 (Tenn. 1977):
If a motion [for directed verdict] made at the conclusion of the
plaintiff’s proof is overruled, the defendant must stand upon
his motion, and rest his case without offering proof, in order to
have the record at that point preserved for appellate review. If
the motion is overruled and the defendant does not stand upon
the motion, but rather proceeds to offer evidence, then it is
necessary for the defendant to “renew” his motion actually to
make another motion at the end of all of the evidence in order
to have the same considered. Both the trial and appellate courts
then review the entire record, not just the plaintiff’s case in
chief, in determining whether the defense motion should be
granted.
....
The law in Tennessee is well-established on this issue, and it is not
the role of this Court to depart from it. See, e.g., Searle v. Bryant, 713 S.W.2d
62, 66 (Tenn. 1986) (“It is well-settled that a defendant waives his right to
rely on error in the denial of his motion for directed verdict made at the end
of the plaintiff’s proof if he goes forward with his own proof rather than
resting on the motion.”); Hatfield v. Allenbrooke Nursing & Rehab. Ctr.,
LLC, No. W2017-00957-COA-R3-CV, 2018 WL 3740565, at *28 (Tenn. Ct.
App. Aug. 6, 2018) perm. app. denied (Tenn. Jan. 17, 2019) (“[F]ollowing
the denial of Defendants’ motion for directed verdict at the close of Plaintiff’s
proof, Defendants chose to present their own evidence. As such,
consideration of the trial court’s initial decision to deny the motion for
directed verdict is waived.”); McLemore ex rel. McLemore v. Elizabethton
Med. Inv’rs, Ltd. P’ship, 389 S.W.3d 764, 778 (Tenn. Ct. App. 2012) (“For
this Court to review the sufficiency of the evidence on appeal, a motion for
a directed verdict must have been made at the conclusion of all of the proof
and renewed in a post judgment motion following the jury’s
verdict.”); McDonald v. Metro. Gov’t of Nashville & Davidson Cty., No.
M2004-02852-COA-R3-CV, 2006 WL 846000, at *3 (Tenn. Ct. App. Mar.
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31, 2006) (“Metro failed to renew its motion for a directed verdict at the close
of all the evidence. Failing to do so constituted a waiver of the issue.”);
Steele v. Columbia/HCA Health Care Corp., No. W2001-01692-COA-R3-
CV, 2002 WL 1000181, at *3 (Tenn. Ct. App. May 13, 2002) (“[I]n order
for this Court to review the sufficiency of the evidence on appeal, the motion
for a directed verdict must have been made at the conclusion of all of the
proof and renewed in a post judgment motion following the jury’s
verdict.”); Cortez v. Alutech, Inc., 941 S.W.2d 891, 894 (Tenn. Ct. App.
1996) (“Once Appellants moved for a directed verdict at the close of
Appellees’ proof, it was incumbent upon them to renew their motion at the
close of all the proof as an initial step to preserving the issue for review on
appeal.”); Boyd v. Sears, Roebuck & Co., 1986 WL 3162, at *1 (Tenn. Ct.
App. Mar. 12, 1986) (“When a defendant moves for a directed verdict at the
conclusion of plaintiff’s proof but fails to renew the motion at the conclusion
of all the proof, it waives its right to raise the issue on appeal.”); Potter v.
Tucker, 688 S.W.2d 833, 835 (Tenn. Ct. App. 1985) (“The motion must be
made at the conclusion of all the proof in order for it to be considered by the
trial court on a post trial motion and by this court on appeal.”).
Id. at *12-13. In keeping with this precedent, we find that because Mr. Catalogne failed to
renew his Tenn. R. Civ. P. 50 motion for directed verdict at the close of all proof, he waived
appellate review of whether the evidence of Ms. Hogue’s due diligence was sufficient to
support the jury’s verdict on her claim for intentional misrepresentation and fraud.
Nevertheless, we proceed to review the record to determine whether any material
evidence exists to support the jury’s verdict. To succeed on a claim for intentional or
fraudulent misrepresentation, a plaintiff must prove:
1) the defendant made a representation of an existing or past fact; 2) the
representation was false when made; 3) the representation was in regard to a
material fact; 4) the false representation was made either knowingly or
without belief in its truth or recklessly; 5) plaintiff reasonably relied on the
misrepresented material fact; and 6) plaintiff suffered damage as a result of
the misrepresentation.
Walker v. Sunrise Pontiac-GMC Truck, 249 S.W.3d 301, 311 (Tenn. 2008) (quoting Metro.
Gov’t of Nashville & Davidson Cty. v. McKinney, 852 S.W.2d 233, 237 (Tenn. Ct. App.
1992)). “A party may be held liable for concealing or failing to disclose a material fact to
the same extent that the party may be held liable for intentional misrepresentation.” Pitz
v. Woodruff, No. M2003-01849-COA-R3-CV, 2004 WL 2951979, at *8 (Tenn. Ct. App.
Dec. 17, 2004). Therefore, in order to establish a claim for fraudulent concealment or
fraudulent non-disclosure, a plaintiff “must show that (1) the defendant had knowledge of
a material existing fact or condition, and that (2) the defendant had a duty to disclose the
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fact or condition.” Id. (citing Lonning v. Jim Walter Homes, Inc., 725 S.W.2d 682, 685
(Tenn. Ct. App. 1986)). “Although there may be a duty to disclose material facts, a party
does not have a duty to disclose a material fact where ordinary diligence would have
revealed the undisclosed fact.” PNC Multifamily Cap. Institutional Fund XXVI Ltd. P’ship
v. Bluff City Cmty. Dev. Corp., 387 S.W.3d 525, 550 (Tenn. Ct. App. 2012) (citing
Simmons v. Evans, 206 S.W.2d 295, 296-97 (Tenn. 1947); Lonning, 725 S.W.2d at 684).
Mr. Catalogne’s singular argument with respect to the claim of fraudulent
misrepresentation is that the evidence is not legally sufficient to support a finding that Ms.
Hogue acted with “due diligence” which negated Mr. Catalogne’s duty to disclose the
water intrusion.3 As we have explained, it is not our function to weigh the evidence or
determine the credibility of the witnesses, we simply look for material evidence to support
the verdict. Here, Mr. Catalogne concedes that Ms. Hogue hired a home inspector who did
not find evidence of water intrusion. In addition, Mr. Catalogne testified that the damage
from water intrusion was repeatedly remedied by P&C prior to listing the property for sale:
Q. How many times did you have to rip out the basement because of flooding
damage?
A. Twice.
Q. And each time the water flooded into the property you ripped out the
drywall?
A. Right. It was cut. The insulation was removed. The studs were cleaned
with industrial cleaner. And then floor dryers – industrial size floor dryers
and dehumidifiers were brought in. Once everything was satisfactorily dried,
new insulation and drywall installed then painted and new baseboards.
Q. Each time that happened you did all of that and you put it back on the
market?
A. Yes.
The evidence showed that each time water intrusion damaged the property during the time
P&C owned it, P&C repaired the damage such that it was not obvious that the home had
ever experienced water intrusion into the basement. Furthermore, Ms. Hogue hired a home
inspector who did not discover or disclose any prior water intrusion issues. This evidence
provides material support for the jury’s conclusion that Ms. Hogue acted with due diligence
in pursuing her purchase of the home. Any other conclusion would require substitution of
this Court’s judgment for that of the jury, which we cannot do. Therefore, we affirm the
jury’s verdict on the claim of intentional misrepresentation and fraud because 1) Mr.
Catalogne waived appellate review of whether the evidence of Ms. Hogue’s due diligence
is sufficient to support a jury verdict on her claim for intentional misrepresentation and
3
Mr. Catalogne does not attack any other element of the cause of action of intentional misrepresentation
and fraud, nor does he make any assertion of error with respect to the jury instructions.
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fraud by failing to move for directed verdict at the close of her proof, and 2) material
evidence supports the jury’s finding on the issue of her due diligence.
B. Failure to Object to Expert Witness Testimony
Mr. Catalogne insists that Ms. Hogue’s expert, John Corn, “should not have been
admitted as an expert in this case because Mr. Corn was not qualified to testify on the
subject matter; and because Mr. Corn’s testimony was unreliable.” Ms. Hogue argues that
this issue is waived, pointing out that Mr. Catalogne failed to file a pre-trial motion
attacking Mr. Corn’s qualifications, that he did not object to the specific testimony that he
complains of at trial, and that he neglected to raise the issue of Mr. Corn’s qualifications
in his post-trial briefing.
“[Q]uestions regarding the admissibility, qualifications, relevancy and competency
of expert testimony are left to the discretion of the trial court.” McDaniel v. CSX Transp.,
Inc., 955 S.W.2d 257, 263 (Tenn. 1997) (citing State v. Ballard, 855 S.W.2d 557, 562
(Tenn. 1993)). Thus, a trial court’s decision to exclude or admit an expert is reviewed
under the abuse of discretion standard. Wortham v. Kroger Ltd. P’ship I, No. W2019-
00496-COA-R3-CV, 2020 WL 4037649, at *18 (Tenn. Ct. App. July 16, 2020) (citing
Holder v. Westgate Resorts Ltd., 356 S.W.3d 373, 376 (Tenn. 2011)). Under the abuse of
discretion standard, a trial court’s ruling “‘will be upheld so long as reasonable minds can
disagree as to propriety of the decision made.’” Eldridge v. Eldridge, 42 S.W.3d 82, 85
(Tenn. 2001) (quoting State v. Scott, 33 S.W.3d 746, 752 (Tenn. 2000); State v. Gilliland,
22 S.W.3d 266, 273 (Tenn. 2000)). Generally speaking, a trial court should “admit the
testimony of a competent expert unless the party opposing the expert’s testimony shows
that it will not substantially assist the trier of fact or if the facts or data on which the opinion
is based are not trustworthy pursuant to Rules 702 and 703.”4 Shipley v. Williams, 350
S.W.3d 527, 551 (Tenn. 2011).
Turning to Ms. Hogue’s waiver argument, we note that a litigant’s failure to “make
a timely, specific objection in the trial court prevents a litigant from challenging the
introduction of inadmissible evidence for the first time on appeal.” Wright v. United Servs.
Auto. Ass’n, 789 S.W.2d 911, 914 (Tenn. Ct. App. 1990) (citations omitted); see TENN. R.
EVID. 103(a)(1) (stating that error may not be predicated on the admission of evidence
unless “a timely objection or motion to strike appears of record, stating the specific ground
of objection if the specific ground was not apparent from the context.”); TENN. R. APP. P.
36(a) (“Nothing in this rule shall be construed as requiring relief be granted to a party
4
Tennessee Rules of Evidence 702 and 703 govern the admissibility of expert proof. Rule 702 states
that “[i]f scientific, technical, or other specialized knowledge will substantially assist the trier of fact to
understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge skill,
experience, training, or education may testify in the form of an opinion or otherwise.” TENN. R. EVID. 702.
Rule 703 requires the underlying data upon which the expert relies to be “of a type reasonably relied upon
by experts in the particular field in forming opinions or inferences upon the subject.” TENN. R. EVID. 703.
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responsible for an error or who failed to take whatever action was reasonably available to
prevent or nullify the harmful effect of an error.”). The rationale for requiring an objection
at trial has been explained by our Supreme Court as follows:
Any other rule would result in setting a trap for the other side of the
controversy. When objection is made to evidence, and specified, this
notification may enable opposing counsel to obviate it, and thus make the
evidence competent, but, if the party making an erroneous objection should
be allowed to withhold a good objection and make that in the appellate court,
where there can be no possibility of avoiding the difficulty by other evidence,
this would give a very great advantage to the party so withholding his real
objection, and result in corresponding disadvantage and injustice to the
opposing litigant.
Middle Tenn. R.R. Co. v. McMillan, 184 S.W. 20, 24 (Tenn. 1916). Our Supreme Court
has also explained:
“even in cases where error might exist, a litigant will not be permitted to raise
questions and issues on appeal that have not first been presented to the trial
court. The trial court must be given the opportunity to correct errors in the
conduct of a trial such as the erroneous admission of evidence before a
litigant will be able to seek reversal on appeal.”
Emory v. Memphis City Sch. Bd. of Educ., 514 S.W.3d 129, 146 (Tenn. 2017) (quoting In
re Billing & Collection Tariffs of S. Cent. Bell, 779 S.W.2d 375, 380 (Tenn. Ct. App.
1989)).
Mr. Catalogne complains that “Mr. Corn never worked in the residential sector” and
that he “was paid by Plaintiff to present the most extreme and expensive remediation
method to the jury.” We begin by reviewing the testimony of Mr. Corn to determine
whether any objections were made regarding Mr. Corn’s qualifications and expertise in
engineering and ground/surface water at trial. After detailing Mr. Corn’s relevant
experience and educational background, Ms. Hogue’s counsel tendered Mr. Corn as an
expert in engineering and ground/surface water. Mr. Catalogne’s counsel then engaged in
voir dire with Mr. Corn. At the conclusion of voir dire, the trial court presented Mr. Corn
as an expert, and made the following statements:
THE COURT: I’m just trying to think about, for the record, what to say the
extent of his expertise is. So the Court is going to recognize Mr. Corn as an
engineer with an expertise in ground water, which is a little more
uncomfortably broad than I would normally like; but I’m going to allow [Mr.
Catalogne’s attorney] to object, if you perceive -- if he perceives that the area
is outside of what has been presented as Mr. Corn’s expertise. Since I don’t
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know where he's going to go, I’m just going to – I’m going to recognize him
as an expert, but just – I’m a little unclear about the breadth of his testimony.
Thus, the court urged Mr. Catalogne’s counsel to object if Mr. Corn went afield of his area
of expertise. However, no objection was lodged to Mr. Corn’s qualifications at the time
he was tendered as an expert. In his reply brief, Mr. Catalogne points to a single objection
raised during Mr. Corn’s testimony that he believes satisfies the requirement that a
contemporaneous objection be made at trial. The context of the objection is as follows,
and the specific objection is italicized:
Q. Approximately how often does the area get a substantially heavy
rainfall that might be more than -- how much water would be like an inch in
a day? Is that a lot of water, because I don’t
A. Yes. Based on, I guess, the specific flood that Ms. Hogue had, I
think it was in December of 2018, believe that’s the date, on that day we had
1.77 inches of water measured at the Inglewood site and 2.23 inches in a day
measured at the Whites Creek area.
Q. So that’s the example of the rainfall where Ms. Hogue had told you
she had experienced a large flood?
A. Correct.
Q. Have we -- previous to that what were some rainfall numbers that
fell in Nashville, essentially? How many instances did we have like that?
[MR. CATALOGNE’S ATTORNEY]: Your Honor, I’m not certain
he’s qualified to speak to this. He’s using information from something else,
so it’s coming in as hearsay. How can he tell? He’s referring to something.
We haven’t established that that’s a reliable source.
THE COURT: Let me ask you, Mr. Lux, I do think testifying about
amounts of rainfall [is] within[] his expertise of ground water -- or surface
water, I’m sorry; but I do think a foundation needs to be laid as to the source
of this information and what learned treatise he would be relying on it for it.
So if you will cover that ground for us, Mr. Lux –
MR. LUX: Sure.
THE COURT: -- so we have a little more of a basis of how this
information is determined.
BY MR. LUX: Q. Mr. Corn, as an engineer specializing in surface
and ground water, how are you able to determine what the rainfall is on a
particular day or over a particular time period?
A. With our things called rain meters. So USGS is the public entity.
They publish –
Q. Who is the USGS? I don’t mean to cut you off.
A. Sure. United States Geologic Survey.
Q. This is a –
A. It’s a public federal program.
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Q. Is that a common source for engineers such as yourself to gain this
type of information?
A. Yes. They have thousands and thousands of gauges on rivers as
well as rain gauges in areas. They collect water fall examples all over the
country. They are typically [a] very, very good agency to -- that data is very
reliable, historically.
The only objection Mr. Catalogne’s counsel made during Mr. Corn’s testimony was
regarding the source of information for determining the amount of rainfall in the area. This
hearsay objection does not relate to Mr. Corn’s qualifications as an engineer or to the
methodologies that he used to determine the size of the water remediation system necessary
to remedy Ms. Hogue’s water intrusion problems. Moreover, Mr. Catalogne does not
assign any error on appeal related to the determination of the amount of rainfall at issue in
this case. We conclude that because Mr. Catalogne’s counsel failed to contemporaneously
object regarding Mr. Corn’s qualifications at trial, he has waived his ability to seek redress
for any error in the court’s admission of Mr. Corn as an expert on appeal.5 See Jernigan v.
Paasche, 637 S.W.3d 746, 760 (Tenn. Ct. App. 2021).
C. Closing Argument
Mr. Catalogne asserts that a new trial is warranted because Ms. Hogue’s counsel
“made statements of fact not in the record along with highly prejudicial statements of
opinion” during closing arguments. Again, Ms. Hogue asserts this argument is waived due
to Mr. Catalogne’s counsel’s failure to contemporaneously object to the argument at trial.
The trial court has the purview to control argument of counsel at trial:
In general, the control over the argument of counsel resides with the
trial court, and the trial court has broad discretion as to what shall and shall
not be permitted in argument. The appellate courts generally will not
interfere with the discretionary action of a trial court in refusing to grant a
mistrial or a new trial for misconduct of counsel in argument unless
the argument is clearly unwarranted and made purely for the purpose of
appealing to passion, prejudices and sentiment which cannot be removed by
sustaining the objection of opposing counsel.
Davis v. Hall, 920 S.W.2d 213, 217 (Tenn. Ct. App. 1995) (citing Perkins v. Sadler, 826
S.W.2d 439, 442 (Tenn. Ct. App. 1991)). “The trial court determines what is permitted in
5
To the extent Mr. Catalogne urges us to find that Mr. Corn’s testimony was unreliable, he is asking
us to substitute our judgment for that of the jury’s, which is not our function on appeal. Duran, 271
S.W.3d at 204-05.
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the argument of counsel.” Freeman v. Blue Ridge Paper Prods., Inc., 229 S.W.3d 694,
712 (Tenn. Ct. App. 2007) (citing Davis, 920 S.W.2d at 217). Importantly, any issue
regarding the propriety of statements made during closing arguments is waived if raised
for the first time in a motion for new trial or on appeal. See Ward v. Glover, 206 S.W.3d
17, 39 (Tenn. Ct. App. 2006) (quoting Lee v. Lee, 719 S.W.2d 295, 299 (Tenn. Ct. App.
1989)) (“‘An objection to the remarks or conduct of counsel must be made at the trial and
a ruling had thereon, or they will not be considered on appeal.’”).
We have reviewed the closing arguments proffered by the parties, and we have
determined that any argument predicated on the alleged prejudicial closing statements of
Ms. Hogue’s counsel is waived because Mr. Catalogne’s counsel failed to
contemporaneously object to the statements he now complains of.6
D. Compensatory Damages
Mr. Catalogne argues that the award of compensatory damages was excessive and
that cost of repair should have been the measure of damages. Ms. Hogue asserts the cost
of repair is not the appropriate measure of damages for an intentional misrepresentation
cause of action and that the evidence supports the jury’s award.
We begin by considering the appropriate measure of damages in an action for
fraudulent misrepresentation. In such cases, our Supreme Court has adopted the measure
of damages outlined in the Restatement (Second) of Torts:
(1) The recipient of a fraudulent misrepresentation is entitled to recover as
damages in an action of deceit against the maker the pecuniary loss to him of
which the misrepresentation is a legal cause, including (a) the difference
between the value of what he has received in a transaction and its purchase
price or other value given for it; and (b) pecuniary loss suffered otherwise as
a consequence of the recipient’s reliance upon the misrepresentation.
(2) The recipient of a fraudulent misrepresentation in a business transaction
is also entitled to recover additional damages sufficient to give him the
benefit of his contract with the maker, if these damages are proved with
reasonable certainty.
Boling v. Tenn. State Bank, 890 S.W.2d 32, 35 (Tenn. 1994) (RESTATEMENT (SECOND) OF
TORTS §549 (1977)) (emphasis added); see also Maddox v. Olshan Found. Repair and
6
Furthermore, Mr. Catalogne’s brief does not provide any citation to where any objections were lodged
with the trial court. Rule 6 of the Rules of the Court of Appeals of Tennessee provides that arguments must
be accompanied by “[a] statement showing how such alleged error was seasonably called to the attention
of the trial judge with citation to that part of the record where appellant’s challenge of the alleged error is
recorded.” TENN. R. CT. APP. 6(a)(2). Mr. Catalogne’s counsel’s responsive closing argument does not
constitute an objection to Ms. Hogue’s counsel’s argument.
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Waterproofing Co. of Nashville, L.P., No. M2018-00892-COA-R3-CV, 2019 WL
4464816, at *23 (Tenn. Ct. App. Sept. 18, 2019). Importantly, “‘[t]he measure of damages
and the fixing of the value of the property are to be determined at the time of the
transaction.’” Dixon v. Chrisco, No. M2018-00132-COA-R3-CV, 2018 WL 4275535, at
*7 (Tenn. Ct. App. Sept. 7, 2018) (quoting Haynes v. Cumberland Builders, Inc., 546
S.W.2d 228, 233 (Tenn. Ct. App. 1976)). When reviewing a jury’s award of compensatory
damages, an appellate court is to “determine whether there is material evidence to support
the jury’s verdict.” Massingille v. Vandagriff, No. M2012-01259-COA-R3-CV, 2013 WL
5432893, at *4 (Tenn. Ct. App. Sept. 24, 2013) perm. app. denied (citing Harper v.
Watkins, 670 S.W.2d 611, 631 (Tenn. Ct. App. 1983); TENN. R. APP. P. 13(d)).
As an initial matter, in light of the precedence cited above regarding the measure of
damages in a fraudulent misrepresentation case, we find no merit in Mr. Catalogne’s
argument that the cost of repair was the only appropriate measure of damages to apply in
this case. Next, we consider whether material evidence supports the amount of
compensatory damages the jury found. Bobbie Noreen, Ms. Hogue’s expert on a realtor’s
“professional standard of conduct and ethics, and also on marketability and evaluation of
real estate for sale” provided the evidence on the difference between the value of what Ms.
Hogue received in the transaction versus the home’s purchase price. Ms. Noreen testified
as follows:
Q. Again, based on the 2018 values, which is the time Ms. Hogue
bought this property, what would you place the value of the property at in the
condition that she bought it with the flooding?
A. Like right now?
Q. If we were back in 2018 --
A. Okay. And there was no mitigation.
Q. And there was no mitigation and the property condition was
known as of flooding, what would the value - -
A. To the extent that it is?
Q. Yes.
A. Zero.
Q. So zero?
A. Right.
Q. And so - -
A. I mean, I wouldn’t know how to even sell this property with
knowing what we know.
Q. Is it your opinion that if you fully disclosed a flooding issue, that
this property would be marketable in any way?
A. Well, it would be the extent of the flooding issue. I mean, there’s
flooding and then there’s flooding. And from the pictures I saw this property
is situated in such a way it is not just your average flooding basement that
the sump pump will take care of.
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I mean, a lot of properties flood in Middle Tennessee, and that’s not
uncommon. But this one, based on what I have seen and talked with or read
from the engineer and what I have seen happens, I’m at a loss of how I would
market this property effectively at a price that someone would be willing to
take on such an adverse fact.
Q. To sum up, is it your opinion that based on what would need to be
done to bring the property up to marketability and based on the disclosure
that would have to be made for the flooding, the property’s value would be
zero?
A. It would be cost prohibitive for anybody to want to take that on to
the extent of this particular complexity of flooding, let’s put it that way.
Mr. Catalogne provided no expert testimony to refute Ms. Noreen’s testimony on the value
and marketability of the property at the time of the sale. Regardless of any countervailing
proof, we find that Ms. Noreen’s testimony constitutes material evidence to support the
jury’s award of compensatory damages to Ms. Hogue. Therefore, we affirm the jury’s
verdict of compensatory damages.
E. Punitive Damages
Punitive damages are available in Tennessee “in the most egregious of cases” and
only when the “claimant proves by clear and convincing evidence that the defendant
against whom punitive damages are sought acted maliciously, intentionally, fraudulently
or recklessly.” Tenn. Code Ann. § 29-39-104(a)(1); Hodges v. S.C. Toof & Co., 833
S.W.2d 896, 901 (Tenn. 1992); Hudson, Holeyfield & Banks, G.P. v. MNR Hosp., LLC,
No. W2019-00123-COA-R3-CV, 2020 WL 4577483, at *9-10 (Tenn. Ct. App. Aug. 7,
2020) (construing the procedure from Tenn. Code Ann. § 29-39-104); see also Punitive
Damages (for cases accruing on or after October 1, 2011), 8 TENN. PRAC. PATTERN JURY
INSTR., T.P.I.-Civil 14.55A (20th ed. 2020). Our Supreme Court has instructed:
“A person acts intentionally when it is the person’s conscious objective or
desire to engage in the conduct or cause the result. 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 representation.”
Overton v. Westgate Resorts, Ltd., L.P., No. E2014-00303-COA-R3-CV, 2015 WL
399218, at *4 (Tenn. Ct. App. Jan. 30, 2015) (quoting Hodges, 833 S.W.2d at 901) (internal
citations omitted). The plaintiff bears the burden of proving the “defendant’s intentional,
fraudulent, malicious, or reckless conduct by clear and convincing evidence.” Hodges, 833
S.W.2d at 901; see also Tenn. Code Ann. § 29-39-104(a)(2). “Clear and convincing
- 18 -
evidence” is “evidence in which there is no serious or substantial doubt about the
correctness of the conclusions drawn from the evidence.” Hodges, 833 S.W.2d at 901 n.3.
In trials where punitive damages are sought, the proceedings must be bifurcated.
Tenn. Code Ann. § 29-39-104(a)(1); Culbreath v. First Tenn. Bank Nat’l Ass’n, 44 S.W.3d
518, 527 (Tenn. 2001); Hudson, Holeyfield & Banks, G.P., 2020 WL 4577483, at *9-10
(holding that bifurcated proceedings are mandatory in punitive damages cases). In the first
phase of the proceedings “the trier of fact . . . shall first determine whether compensatory
damages are to be awarded and in what amount and by special verdict whether each
defendant’s conduct was malicious, intentional, fraudulent or reckless . . . .” Tenn. Code
Ann. § 29-39-104(a)(2). Next, if the defendant is found to have engaged in “malicious,
intentional, fraudulent, or reckless conduct, then the court shall promptly commence an
evidentiary hearing in which the jury shall determine the amount of punitive damages, if
any[.]” Tenn. Code Ann. § 29-39-104(a)(3). Tennessee Code Annotated section 29-39-
104(a)(4) sets forth the following factors that “shall” be considered “to the extent relevant”
when “determining the amount of punitive damages” in the second phase of the bifurcated
proceeding:
the defendant’s financial condition and net worth; the nature and
reprehensibility of the defendant’s wrongdoing; the impact of the defendant’s
conduct on the plaintiff; the relationship of the defendant to the plaintiff; the
defendant’s awareness of the amount of harm being caused and the
defendant’s motivation in causing such harm; the duration of the defendant’s
misconduct and whether the defendant attempted to conceal such
misconduct; the expense plaintiff has borne in attempts to recover the losses;
whether the defendant profited from the activity, and if defendant did profit,
whether the punitive award should be in excess of the profit in order to deter
similar future behavior; whether, and the extent to which, defendant has been
subjected to previous punitive damage awards based upon the same wrongful
act; whether, once the misconduct became known to defendant, defendant
took remedial action or attempted to make amends by offering a prompt and
fair settlement for actual harm caused; and any other circumstances shown
by the evidence that bear on determining a proper amount of punitive
damages. The trier of fact shall be instructed that the primary purpose of
punitive damages is to punish the wrongdoer and deter similar misconduct in
the future by the defendant and others while the purpose of compensatory
damages is to make the plaintiff whole[.]
See also Hudson, Holeyfield & Banks, G.P., 2020 WL 4577483, at *9-10.
Following an award of punitive damages by a jury, our Supreme Court has required
the trial court to review the award as follows: “[i]n jury cases the trial judge must review
the jury’s award of punitive damages and ‘clearly set forth the reasons for decreasing or
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approving all punitive awards in findings of fact and conclusions of law demonstrating a
consideration of all factors on which the jury is instructed.’” Culbreath, 44 S.W.3d at 528(quoting Hodges, 833 S.W.2d at 902) (emphasis added); see also Coffey v. Fayette Tubular
Prods., 929 S.W.2d 326, 328 (Tenn. 1996) (emphasizing that the Hodges Court “made it
very clear that the trial court must thoroughly review any award of punitive damages made
by the jury”); Massingille, 2013 WL 5432893, at *5 (vacating a jury’s award of punitive
damages and remanding the case for the trial court to enter a supplemental order setting
forth its findings as to the Hodges factors7 and the reasons supporting the award of punitive
damages); McLemore, 389 S.W.3d at 778 (noting that the Tennessee Supreme Court
“instructed trial courts to conduct a special review of a jury’s determination of the amount
of punitive damages”). Our Supreme Court has summarized the requirement for trial court
review of punitive damages as follows:
7
We note that the factors outlined in Tenn. Code Ann. § 29-39-104(a)(4) are essentially identical to the
nine factors the Supreme Court identified in Hodges, which are as follows:
(1) The defendant’s financial affairs, financial condition, and net worth;
(2) The nature and reprehensibility of defendant’s wrongdoing, for example
(A) The impact of defendant’s conduct on the plaintiff, or
(B) The relationship of defendant to plaintiff;
(3) The defendant’s awareness of the amount of harm being caused and defendant’s
motivation in causing the harm;
(4) The duration of defendant’s misconduct and whether defendant attempted to conceal
the conduct;
(5) The expense plaintiff has borne in the attempt to recover the losses;
(6) Whether defendant profited from the activity, and if defendant did profit, whether the
punitive award should be in excess of the profit in order to deter similar future behavior;
(7) Whether, and the extent to which, defendant has been subjected to previous punitive
damage awards based upon the same wrongful act;
(8) Whether, once the misconduct became known to defendant, defendant took remedial
action or attempted to make amends by offering a prompt and fair settlement for actual
harm caused; and
(9) Any other circumstances shown by the evidence that bear on determining the proper
amount of the punitive award.
Hodges, 833 S.W.2d at 901-02. We also note that Tenn. Code Ann. § 29-39-104(b) states:
Nothing in this section shall be construed as creating a right to an award of punitive
damages or to limit the duty of the court, or the appellate courts, to scrutinize all punitive
damage awards, ensure that all punitive damages awards comply with applicable
procedural, evidentiary and constitutional requirements, and to order remittitur when
appropriate.
Thus, the enaction of Tenn. Code Ann. § 29-39-104 does not diminish the requirement of a trial court to
review the jury’s punitive damages award.
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Once a jury awards punitive damages, the trial court must review the
award to ensure that the wrongdoer’s conduct rose to the level where punitive
damages are appropriate. Hodges, 833 S.W.2d at 902. The trial court thus
reviews the evidence to consider whether the jury’s findings are supported
by clear and convincing evidence and whether the punitive award effectively
punishes and deters the defendant from committing the same acts in the
future.
Goff v. Elmo Greer & Sons Constr. Co., 297 S.W.3d 175, 188 (Tenn. 2009). “In the
absence of sufficient findings of fact and conclusions of law as to each of the relevant
Hodges criteria, an appellate court cannot adequately review the trial court’s award of
punitive damages.” Culbreath, 44 S.W.3d at 528.8
In this case, the jury verdict form from the first phase of trial asked the jurors: “Do
you find that Jason Catalogne committed intentional misrepresentation and fraud?” The
jury responded affirmatively, checking “yes.” The verdict form went on and asked: “Do
you find by clear and convincing evidence that Jason Catalogne acted either [f]raudulently,
[i]ntentionally, [m]alicioulsy, or [r]ecklessly and that an award of punitive damages should
result?” Again, the jury answered affirmatively, checking “yes.” The case proceeded to
the second phase, which included a brief hearing. The jury was then provided a verdict
form asking: “What amount of punitive damages do you award Lorenta Hogue?” The jury
wrote “$250,000” on the blank above the signature of the jury foreperson. Thereafter, Mr.
Catalogne filed a Motion for a New Trial or to Alter or Amend the Judgment by Granting
a Remittitur and a Motion for Judgment Notwithstanding the Verdict or in the Alternative
for a New Trial. The trial court summarily denied the motions stating: “Based upon the
Motion, together with a contemporaneously filed Affidavit of Jason Catalogne and all
attachments thereto, Plaintiff’s Response to the Motion, as well as hearing arguments from
counsel, it appears unto the Court that the Motion shall be DENIED.” There is nothing in
the record to suggest that the trial court reviewed the jury’s verdict on punitive damages to
consider all factors on which the jury was instructed, in particular the factors outlined in
Tenn. Code Ann. § 29-39-104(a)(4) (formerly referred to as the “Hodges factors”). As our
Supreme Court has instructed, this special review by the trial court in punitive damages
8
During the second phase of the trial, when the parties were determining whether to immediately move
forward or delay the second phase of trial, Ms. Hogue’s attorney acknowledged the trial court’s duty to
review the award of punitive damages, stating:
My suggestion was actually going to be go forward with the entire proceeding today, let
the Jury make their determination on all the other factors except for financial condition or
net worth. And obviously, the Court is required to review all of the factors anyway.
If the Jury returns something that is out of line with Mr. Catalogne’s net worth or income,
then the Court would remit that amount based on information produced at a later date.
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cases is an essential review that must be conducted before we can undertake our appellate
review. Culbreath, 44 S.W.3d at 528. Therefore, as we did in Massingille v. Vandagriff,
“we must vacate the award and remand the case for the trial court to enter a supplemental
order setting forth its findings as to the [Tenn. Code Ann. § 29-39-104(a)(1)] factors and
the reasons supporting the award of punitive damages.” Massingille, 2013 WL 5432893,
at *5.
CONCLUSION
For the foregoing reasons, we affirm the jury’s verdict with respect to the claim of
intentional misrepresentation and fraud; we find any argument regarding the admissibility
of Ms. Hogue’s expert’s testimony and any error in the admission of alleged prejudicial
statements during closing argument waived; and we affirm the measure of damages and
award of compensatory damages because there was material evidence in the record to
support the monetary award. However, because the trial court failed to properly review
the award of punitive damages, we vacate the award of punitive damages and remand the
case for entry of a supplemental order reviewing all factors on which the jury was
instructed, including, but not limited to, the factors outlined in Tenn. Code Ann. § 29-39-
104(a)(4). Therefore, the judgment of the trial court is affirmed in part and vacated in part.
Costs of this appeal are assessed against the parties equally, for which execution may issue
if necessary.
_/s/ Andy D. Bennett_______________
ANDY D. BENNETT, JUDGE
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