Ferris v. Tennessee Log Homes, Inc.

Lance and Kathleen Ferris (plaintiffs) had hoped to spend their retirement living in a log cabin, so they contacted Tennessee Log Homes, Inc. (Tennessee Log) (defendant) about possibly constructing one for them. Tennessee Log put the Ferrises in touch with Vince and Pat Zara (defendants), the company’s licensed dealers. The Zaras gave the Ferrises a tour of a model log cabin, representing to them that it would cost about $325,000 to build a cabin of their own. The Zaras also told the Ferrises that Larry Jones would be the builder for the cabin. The Ferrises signed a written purchase agreement based on these representations. The agreement had a merger clause declaring that all prior representations merged into the written agreement, and that any representations not within the written agreement no longer existed. The purchase agreement itself was silent as to the estimated cost as well as to who would construct the cabin. The estimate the Zaras gave was far too low, and Jones ended up not being the builder. The resulting work was shoddy, and the Ferrises ended up spending over $600,000 to build the log cabin. The Ferrises brought fraudulent-inducement and promissory-fraud claims against Tennessee Log and the Zaras. Both Tennessee Log and the Zaras moved for summary judgment, arguing that the merger clause barred the use of parol evidence to support the claims of fraud.