Stephen H. Bills Et Al. v. Joe B. Barton Et Al.

Litigation arose in connection with a dispute over an option agreement to purchase property.  The parties agreed to settle the case and to allow a Tennessee-licensed real estate appraiser to set the purchase price.  The purchasers, however, moved to set aside the price set by the appraiser.  Relying on the opinions of a licensed real estate broker and a different licensed appraiser, the purchasers argued that the appraiser’s valuation deviated from the required professional standards to such an extent that it fell below the relevant standard of care.  The trial court denied the motion, concluding: (1) the purchasers could not under the settlement agreement challenge the appraisal; (2) even if they could, the real estate broker’s lack of an appraisal license rendered him per se incompetent to testify; and (3) the purchasers failed to provide a declaration from their expert licensed real estate appraiser stating that the appraisal had not been conducted in accordance with professional standards.  In response to a motion to alter or amend, the trial court judge recognized that the purchasers had, in fact, provided such a declaration, but, nevertheless, denied their motion.  The purchasers appeal.  We conclude that the purchasers can challenge the appraiser’s evaluation on the limited basis that he allegedly departed from the professional standard of care.  We also conclude the Tennessee licensed real estate broker not holding a Tennessee real estate appraiser’s license does not per se render his testimony incompetent.  We also conclude that even assuming the testimony from the real estate broker is inadmissible, the purchasers have presented evidence that the appraisal was not conducted in accordance with professional standards.  Accordingly, we remand this case to the trial court for the trial court to reassess the admissibility of the real estate broker’s testimony and to determine whether the appraiser violated the professional standard of care.