Donald L. Tatum and Dorothy L. Tatum v. Vertis J. Wolrsham and Freda Johnson Michel

• Court: Court of Appeals of Tennessee
• Decided: March 1, 1996
• Docket: 03A01-9507-CH-00219
• Status: Published

Opinion

I N THE COURT OF APPEALS OF TENNESSEE

EASTERN SECTI ON FILED March 1, 1996

Cecil Crowson, Jr. Appellate C ourt Clerk DONALD L. TATUM a nd ) HAM LTON COUNTY I DOROTHY R. TATUM ) 03A01- 9507- CH- 00219 ) Pl a i nt i f f s - Appe l l e e s ) ) ) HON. HOWELL N. PEOPLES, v. ) CHANCELLOR ) ) VERTI S J . WORSHAM ) ) De f e nda nt , ) Cr os s - De f e nda nt / Appe l l a nt ) ) a nd ) ) FREDA J OHNSON M CHEL I ) ) De f e nda nt , ) Cr os s - Pl a i nt i f f / Appe l l e e ) AFFI RMED AND REMANDED

W LLI AM G. SCHW I ALL OF CHATTANOOGA FOR APPELLANT

M CHAEL A. ANDERSON OF CHATTANOOGA FOR DONALD L. TATUM a nd I DOROTHY R. TATUM

W FRANK BROW I I I , OF CHATTANOOGA FOR FREDA J OHNSON M CHEL . N, I

O P I N I O N

Godda r d, P. J .

Thi s c a s e or i gi na t e d f r om a c ompl a i nt by Dona l d L.

Ta t u m a nd Dor ot hy R. Ta t um a ga i ns t Ve r t i s J . W s ha m f or s pe c i f i c or

p e r f o r ma nc e of a l a nd s a l e a gr e e me nt a nd da ma ge s . M . a nd M s . r r Ta t u m a me nde d t he i r c ompl a i nt t o j oi n Fr e da J ohns on M c he l , a i

s e c o n d mor t ga ge hol de r of t he s ubj e c t pr ope r t y. The r e a f t e r , M . s

M c h e l f i l e d a c r os s - c l a i m a ga i ns t M . W s ha m, p r i nc i pa l l y i s or

s e e k i n g a de t e r mi na t i on of t he ba l a nc e owi ng on t he s e c ond

mo r t g a g e whi c h wa s i n di s put e .

M . W s ha m a ppe a l s a j udgme nt of t he Ha mi l t on Count y s or

Ch a n c e r y Cour t gr a nt i ng s pe c i f i c pe r f or ma nc e of a l a nd s a l e

c o n t r a c t a nd da ma ge s r e s ul t i ng f r om t he br e a c h of t ha t c ont r a c t

i n f a v o r of M . a nd M s . Ta t um. r r M . W s ha m a l s o a ppe a l s a s or

d e c r e e de t e r mi ni ng t he ba l a nc e owe d on t he s e c ond mor t ga ge a nd

g r a n t i n g he r a t t or ne y' s f e e s .

The f ol l owi ng i s a s umma r y of t he Cha nc e l l or ' s f i ndi n g s

o f f a c t whi c h a r e a c c ompa ni e d by a pr e s umpt i on of c or r e c t ne s s .

Ru l e 1 3 ( d) of t he Te nne s s e e Rul e s of Appe l l a t e Pr oc e dur e .

M . W s ha m a c qui r e d t he pr ope r t y t ha t i s t he s ubj e c t s or

o f t h i s di s put e f r om Fr e da J ohns on ( now Fr e da M c he l ) i n 1993. i

At t ha t t i me , M . M c he l , who now r e s i de s i n Fl or i da , h e l d a s i

s e c o n d mor t ga ge on t he pr o pe r t y. On Nove mbe r 13, 1993, M . s

W r s h a m e nt e r e d i nt o a Re a l Es t a t e Sa l e s Agr e e me nt wi t h M . a nd o r

M s . Ta t um. r The Agr e e me nt pr ovi de d i n pe r t i ne nt pa r t t he

f o l l o wi ng:

4. Shoul d we wr ongf ul l y f a i l or r e f us e t o c a r r y out t h e t e r ms o f t hi s a gr e e me nt , t he Se l l e r s s ha l l ha ve t he r i ght ( 1) t o e l e c t t o de c l a r e t hi s c ont r a c t c a nc e l l e d, i n whi c h e ve nt t he a mount de pos i t e d ma y be r e t a i ne d by

2 t he m a s l i qui da t e d d a ma ge s , o r ( 2) e l e c t t o a f f i r m t hi s c ont r a c t a nd e nf or c e i t s s pe c i f i c pe r f or ma nc e or r e c ove r d a ma ge s f or i t s br e a c h. I n t hi s c a s e , t he d e pos i t s ha l l be r e t a i ne d t o a ppl y on t he s a l e pr i c e or o n t he da ma ge s r e c ove r e d.

9. Shoul d t hi s of f e r be a c c e pt e d by t he s e l l e r s , t he p a r t i e s he r e t o a gr e e t o c l os e t he pur c ha s e 12- 27- 93.

15. I n e ve nt of t he de f a ul t of e i t he r pa r t y he r e t o, a nd l i t i ga t i on e ns ue s , a r e a s ona bl e a t t or ne y' s f e e s ha l l be i nc l ude d i n t he da ma ge s of t he non- de f a ul t i ng pa r t y, r e c ove r a bl e t oge t he r wi t h a ny c our t c os t s .

Th e c o n t r a c t a l s o pr ovi de d t ha t M . W s ha m woul d ma ke r e pa i r s s or

r e q u i r e d by a n FHA a ppr a i s a l a nd s uppl y a wood i nf e s t a t i on

c l e a r a nc e l e t t e r .

The Ta t ums we r e una bl e t o obt a i n t he ne c e s s a r y

f i n a n c i ng by De c e mbe r 27, 1993. Thus , t he c l os i ng di d not t a k e

p l a c e o n t ha t da t e . But t he pa r t i e s ne got i a t e d f ur t he r a nd a t

l e a s t i mpl i c i t l y a gr e e d t o c l os e t he s a l e on J a nua r y 28, 1994.

Th e Ta t ums a t t e nde d t he c l os i ng on t he pr ope r da t e , a s di d M . s

W r s h a m. o M . W s ha m a s s e r t e d t ha t t he onl y r e a s on s he a t t e nd e d s or

wa s b e c a us e s he wa s t hr e a t e ne d wi t h a l a w s ui t by c ouns e l f or t h e

Ta t ums i f s he f a i l e d t o a t t e nd.

At t he c l os i ng, M . W s ha m r e f us e d t o c l os e t he s a l e s or

b e c a u s e t he r e wa s a di s put e a s t o t he a mount s he owe d on t he

mo r t g a g e he l d by M . M c he l . s i M . M c he l wa s r e s i di ng i n Fl or i d a s i

a n d d i d not a t t e nd t he c l os i ng.

The r e a f t e r , t he Ta t ums br ought t hi s s ui t a ga i ns t M . s

W r s h a m, r e que s t i ng t he Tr i a l Cour t t o or de r s pe c i f i c pe r f or ma n c e o

3 o f t h e i r c ont r a c t . M . W s ha m f i l e d a c r os s - c l a i m a ga i ns t M . s or s

M c h e l s e e ki ng a de t e r mi na t i on of t he a mount owe d on t he mor t ga g e i

h e l d b y M . M c he l . s i M . M c he l c ount e r - c l a i m d. s i e

The Cha nc e l l or f ound t ha t M . W s ha m ha d a c t e d s or

u n r e a s o na bl y by f a i l i ng t o c l os e t he s a l e a nd wa s i n br e a c h of

t h e i r a gr e e me nt . Spe c i f i c a l l y, t he Cha nc e l l or s t a t e d, " t he

a p p r o p r i a t e t hi ng t o do a nd t he pr ope r t hi ng t o do wa s t o go

f o r wa r d wi t h t he c l os i ng a nd e s c r ow a ny di s put e d a mount s o t ha t

a t s o me t i me l a t e r M . W s ha m a nd M . M c he l c a n r e s ol ve s or s i

wh a t e v e r di f f e r e nc e s t he y ha ve e i t he r be t we e n t he m or t hr ough t h e

a pp r o p r i a t e a c t i on. " The Cha nc e l l or gr a nt e d s pe c i f i c pe r f or ma nc e

o f t h e c ont r a c t , a s we l l a s mone t a r y da ma ge s , i n f a vor of t he

Ta t u ms a nd or de r e d t ha t a c l os i ng t a ke pl a c e on J ul y 12, 1994.

Th e Ch a nc e l l or a l s o d i r e c t e d t ha t a de t e r mi na t i on be ma de a s t o

t h e v a l ue of M . M c he l ' s mor t ga ge a nd a wa r de d a t t or ne y' s f e e s t o s i

M . M c he l . s i As t o t he di s put e d por t i on of t he de bt , t he

Ch a n c e l l or or de r e d t ha t t he y be pl a c e d i n e s c r ow unt i l t he Cou r t

ma d e a de t e r mi na t i on of t he a mount owe d.

M . W s ha m r a i s e s s e ve n i s s ue s on a ppe a l , f our a s t o s or

M . a n d M s . Ta t um a nd t hr e e a s t o M . M c he l . r r s i W wi l l a ddr e s s e

e a c h i n t ur n.

M . W s ha m f i r s t a r gue s t ha t t he Tr i a l Cour t e r r e d i n s or

f a i l i n g t o f i nd t ha t t he Ta t um' s ha d br e a c he d t he l a nd s a l e s

c o n t r a c t by be i ng una bl e t o c l os e t he c ont r a c t on De c e mbe r 27,

4 1 9 9 3 , o r , a l t e r na t i ve l y, t ha t t he c ont r a c t ha d e xpi r e d on t ha t

da t e . Es s e nt i a l l y, M . W s ha m i s a r gui ng t ha t t i me wa s of t he s or

e s s e n c e of t he c ont r a c t , a nd by f a i l i ng t o be a bl e t o c l os e on

t h e da t e s pe c i f i e d i n t he c ont r a c t , t he Ta t ums t e r mi na t e d t he

c on t r a c t .

The Cha nc e l l or f ound t ha t t i me wa s not s pe c i f i c a l l y

ma de of t he e s s e nc e by t he t e r ms of t he a gr e e me nt . He r e a s one d

t h a t a l t hough t he a gr e e me nt pr ovi de d a da t e f or c l os i ng, i t di d

n o t s p e c i f y wha t woul d ha ppe n i f t ha t t he s a l e wa s not c l os e d b y

t ha t da t e .

W a gr e e wi t h t h e Cha nc e l l or t ha t t i me wa s not of t h e e

e s s e nc e of t hi s c ont r a c t . I t i s t he l a w i n Te nne s s e e t ha t t i me

i s n o t of t he e s s e nc e of t he c ont r a c t unl e s s s pe c i f i c a l l y ma de of

t h e e s s e nc e by t he l a ngua g e of t he c ont r a c t or i nf e r r e d a s s uc h

b y t h e i nt e nt of t he pa r t i e s a s e xpr e s s e d i n t he i r c ont r a c t .

Co mme r c e St r e e t Co. v. Goo dye a r Ti r e & Rubbe r Co. , 31 Te nn. App.

3 1 4 , 2 1 5 S. W 2d 4 ( 1948) . . M . W s ha m a r gue s t ha t t he t i me of s or

p e r f o r ma nc e wa s f i xe d by t he c ont r a c t a t De c e mbe r 27, 1993.

Gi v e n t he f a c t t ha t t he pa r t i e s c ont i nue d t o ne got i a t e t he s a l e

a f t e r t ha t d a t e a nd t he f a c t t ha t t he c ont r a c t di d not s t a t e t h a t

t h e c o n t r a c t woul d t e r mi na t e i f t he s a l e wa s not c l os e d by t ha t

d a t e , we a gr e e wi t h t he Cha nc e l l or a nd a r e una bl e t o c onc l ude

t h a t t i me wa s ma de of t he e s s e nc e by t he pa r t i e s i n t he i r

c o n t r a c t or by t he i r a c t i ons .

5 Ne xt , M . W s ha m a r gue s t ha t t he Tr i a l Cour t e r r e d b y s or

r u l i n g t ha t s he ha d br e a c he d t he c ont r a c t by r e f us i ng t o c l os e

t h e s a l e on J a nua r y 28, 19 94. The Cha nc e l l or f ound t ha t M . s

W r s h a m ha d a c t e d unr e a s ona bl y whe n s he r e f us e d t o c l os e be c a u s e o

t h e a mo unt due on t he M c h e l mor t ga ge wa s di s put e d. i The

Ch a n c e l l or s t a t e d, a s a l r e a dy not e d, t ha t t he a ppr opr i a t e t hi n g

t o d o woul d be t o pl a c e t he di s put e d f unds i n e s c r ow a nd c ont i n u e

wi t h t h e c l os i ng. Thi s pos i t i on wa s s uppor t e d by t he t e s t i mon y

o f t h e c l os i ng a ge nt pr e s e nt whe n t he pa r t i e s we r e t o c l os e on

J a n u a r y 28.

Ne xt , M . W s ha m a s s e r t s t ha t f or va r i ous r e a s ons , s or

s p e c i f i c pe r f or ma nc e s houl d not ha ve be e n gr a nt e d i n t hi s c a s e .

Fi r s t , M . W s ha m a r gue s t ha t t he pr ope r t y a t i s s ue wa s not s or

u n i q u e a nd t ha t a n a wa r d of da ma ge s woul d ha ve be e n a n a de qua t e

r e me d y . I n doi ng s o M . W s ha m ha s of f e r e d pr oof t ha t t he r e wa s s or

o t h e r p r ope r t i e s i n t he a r e a of t he s ubj e c t pr ope r t y t ha t we r e o f

s i mi l a r va l ue a nd whi c h h a d s i mi l a r c ha r a c t e r i s t i c s .

W be l i e ve t ha t M . W s ha m mi s c ons t r ue s t he l a w of e s or

s p e c i f i c pe r f or ma nc e . " [ S] pe c i f i c pe r f or ma nc e i s r e ga r de d a s

a p p r o p r i a t e whe n de a l i ng wi t h c ont r a c t s f or t he c onve ya nc e of

r e a l p r ope r t y be c a us e r e a l pr ope r t y i s uni que , a nd mor e of t e n

t h a n n o t , a n a wa r d of da ma ge s i s s i mpl y not a n a de qua t e r e me dy . "

GRW En t e r pr i s e s , I nc . v . Da vi s , 797 S. W 2d 606 ( Te nn. App. 1990) . .

As e v i d e nt f r om he r a t t e mpt s t o pr ove t ha t t he s ubj e c t pr ope r t y

i s n o t uni que , M . W s ha m doe s not r e a l i z e t ha t by i t s ve r y s or

6 n a t u r e , r e a l pr ope r t y i s uni que . She poi nt s t o no e xa mpl e of a

Te n n e s s e e c our t f i ndi ng, e xpl i c i t l y or i mpl i c i t l y, t h a t a pi e c e

o f r e a l pr ope r t y wa s not uni que . W a r e not pr e pa r e d t o ma ke e

s u c h a f i ndi ng r e ga r di ng t he pr ope r t y t ha t i s t he s ubj e c t of t h i s

di s put e .

The Cha nc e l l or ma de s pe c i f i c f i ndi ngs t ha t t hi s

p r o p e r t y wa s i nde e d uni que a s t o t he Ta t ums be c a us e i t wa s

l o c a t e d a c r os s t he s t r e e t f r om a gol f c our s e whe r e M . Ta t um r

p l a y s r e gul a r l y a nd wa s r e a s ona bl y pr i c e d.

Howe ve r , we do not hol d t ha t be c a us e r e a l pr ope r t y i s

u n i q u e s pe c i f i c pe r f or ma nc e i s a l wa ys a n a va i l a bl e r e me dy. M. s

W r s h a m c or r e c t l y c i t e s a u t hor i t y f or t he r ul e t ha t s pe c i f i c o

p e r f o r ma nc e s houl d not be gr a nt e d whe r e i t woul d pr oduc e a ha r s h ,

i n e q u i t a bl e , or oppr e s s i ve r e s ul t . Col oni a l Fune r a l Home , I nc .

v . Ha r o l d B. Gi l mor e , e t a l . , a n unpubl i s he d opi ni on of t hi s

Co u r t , f i l e d i n Na s hvi l l e on Se pt e mbe r 23, 1994. I n Col oni al

Fu n e r a l Home , t hi s Cour t de ni e d s pe c i f i c pe r f or ma nc e of a

c on t r a c t f or t he s a l e of r e a l pr ope r t y whe r e a n e l de r l y s e l l e r ,

n o t r e p r e s e nt e d by c ouns e l , gr a nt e d a n i nt e r e s t - f r e e , uns e c ur e d ,

n o n r e c o ur s e pr omi s s or y not e t o t he pur c ha s e r t o f i na nc e t he s a l e .

M . W r s ha m poi nt s t o no e vi de nc e t ha t t he r e s ul t woul d be ha r s h , s o

o p p r e s s i ve or i ne qui t a bl e s houl d s pe c i f i c pe r f or ma nc e be gr a nt e d .

Th u s , we hol d t ha t t he Cha nc e l l or r ul e d c or r e c t l y i n f i ndi ng

s p e c i f i c pe r f or ma nc e t o b e t he a ppr opr i a t e r e me dy i n t he pr e s e nt

s i t u a t i o n.

7 M . W s ha m a l s o a s s e r t s t ha t t he Cha nc e l l or e r r e d i n s or

a wa r d i n g mone t a r y da ma ge s t o t he Ta t ums . The Cha nc e l l or f ound

t h a t b e c a us e t he s a l e di d not c l os e , t he Ta t ums wi l l be f or c e d t o

p a y t h e i r mor t ga ge a t a r a t e of e i ght a nd one - ha l f pe r c e nt ove r

3 0 y e a r s i ns t e a d of s e ve n a nd one - ha l f pe r c e nt ove r 30 ye a r s .

Th e Ch a nc e l l or a wa r de d t he Ta t ums t he pr e s e nt va l ue of t hi s

d i f f e r e nt i a l . He a l s o a wa r de d t he m va r i ous e xpe ns e s a s s oc i a t e d

wi t h r e ne wa l of t he i r l oa n c ommi t me nt whi c h woul d not ha ve be e n

i n c u r r e d ha d M . W s ha m c l os e d t he s a l e a s we ha ve f ound t ha t s or

s h e wa s obl i ga t e d unde r c ont r a c t t o do. The Cha nc e l l or a l s o

a wa r d e d a t t or ne y' s f e e s a s pr ovi de d unde r t he c ont r a c t .

Te nne s s e e c our t s ha ve a wa r de d mone t a r y da ma ge s a l ong

wi t h t h e s pe c i f i c pe r f or ma nc e of a r e a l e s t a t e c ont r a c t .

A d e c r e e f or s pe c i f i c pe r f or ma nc e s e l dom br i ngs a b out pe r f or ma nc e wi t hi n t he t i me t ha t t he c ont r a c t r e qui r e s . I n t hi s r e s pe c t , s uc h a de c r e e i s ne a r l y a l wa ys a de c r e e f or l e s s t ha n e xa c t a nd c ompl e t e p e r f or ma nc e . For t he pa r t i a l br e a c h i nvol ve d i n t he d e l a y or i n ot he r e xi s t i ng non- pe r f or ma nc e , mone y d a ma ge s wi l l b e a wa r de d a l ong wi t h t he de c r e e f or s p e c i f i c pe r f or ma nc e .

Bu s h v . Ca t he y , 598 S. W 2d 777, 783 ( Te nn. App. 1979) . .

Th e a d d i t i ona l f i na nc i ng c os t s a nd a t t or ne y' s f e e s i nc ur r e d by

t h e Ta t ums we r e t he nor ma l a nd f or e s e e a bl e c ons e que nc e of M . s

W r s h a m' s b r e a c h. o

M . W s ha m a r gue s t ha t t he Ta t ums ha d a dut y t o s or

mi t i g a t e t he i r da ma ge s by f i ndi ng a not he r hous e . Unde r t he l a w

8 o f Te n n e s s e e , a pa r t y ha s t he dut y t o us e r e a s ona bl e e f f or t s t o

mi t i ga t e d a ma ge s . I n l i ght of t he f a c t t ha t we ha ve he l d t ha t

r e a l p r ope r t y i s uni que a n d be c a us e we ha ve f ound t ha t t he Ta t u ms

a r e e n t i t l e d t o s pe c i f i c p e r f or ma nc e , i t woul d be unr e a s ona bl e t o

r e q u i r e t he Ta t ums t o f i nd a not he r hous e t o mi t i ga t e t he i r

d a ma ge s .

M . W s ha m a r gu e s t ha t t he Cha nc e l l or e r r e d i n f a i l i n g s or

t o g r a n t a j udgme nt a ga i ns t M . M c he l . s i M . W s ha m a r gue s t h a t s or

M . M c he l a nd he r a t t or ne y a gr e e d t o a s e t t l e me nt of t he a mou n t s i

o we d M . M c he l a nd t he r e a f t e r de ma nde d a hi ghe r a mount . s i M. s

W r s h a m t hus a r gue s t ha t M . M c he l s houl d be pe na l i z e d unde r o s i

T. C. A. 66- 25- 102, whi c h gr a nt s a pe na l t y of $100 f or a r bi t r a r i l y

a n d u n r e a s ona bl y f a i l i ng t o r e l e a s e a de bt s e c ur e d by r e a l

p r o p e r t y.

M . W s ha m a l on e s ubmi t t e d e vi de nc e a t t r i a l a s t o t he s or

a s s e r t e d a gr e e me nt . She a dmi t t e d t ha t i t wa s not r e duc e d t o

wr i t i ng . By f i ndi ng f or M . M c he l , t he Cha nc e l l or , b y s i

i mp l i c a t i on, d i s c r e di t e d M . W s ha m' s t e s t i mony or f e l t t ha t t he s or

a g r e e me nt r e qui r e d a wr i t i ng. M . W s ha m of f e r s no f a c t ua l s or

b a s i s f or us t o ove r t ur n t he f i ndi ng of t he Cha nc e l l or on t hi s

i s s u e a nd we a r e not i nc l i ne d t o do s o.

M W s ha m a r gue s t ha t t he Cha nc e l l or e r r e d i n a wa r d i n g s or

M . M c he l he r a t t or ne y' s f e e s a s pr ovi de d f or i n bot h t he not e s i

a n d t h e de e d of t r us t . M . W s ha m a r gue s t ha t a t t or ne y' s f e e s s or

9 s h o u l d be l i mi t e d t o f e e s i nc ur r e d f r om pr ot e c t i on of t he

s e c u r i t y. Howe ve r , t he not e a l l ows r e c ove r y f or t he c ol l e c t i o n

o f mo n e ys due unde r t he not e . The c r ux of t he di s put e be t we e n

M . W r s ha m a nd M . M c he l wa s t he a mount due on t he not e . s o s i

At t o r n e y' s f e e s a r e a di s c r e t i ona r y r e me dy a nd we a r e not

i n c l i n e d t o ove r t ur n t he f i ndi ngs of t he Cha nc e l l or .

Fi na l l y, M . W s ha m a r gue s t ha t t he Cha nc e l l or e r r e d s or

i n a d mi t t i ng i nt o e vi de nc e a l e t t e r f r om M . M c he l ' s a t t or ne y i n s i

v i o l a t i on of t he r ul e a ga i ns t he a r s a y. Rul e 801 of t he Te nne s s e e

Ru l e s o f Evi de nc e . The l e t t e r wa s obj e c t e d t o a t t r i a l by

c o u n s e l f or M . W s ha m a nd t he obj e c t i on wa s s us t a i ne d. s or

Ho we ve r , t he r e c or d s hows t ha t t he l e t t e r wa s a dmi t t e d. The r e

h a s b e e n no s howi ng t ha t t he l e t t e r wa s r e l i e d on by t he

Ch a n c e l l or . Thus , t he e vi de nc e ha d no ma t e r i a l be a r i ng on t he

i s s u e s de c i de d a nd wa s t hu s ha r ml e s s e r r or .

For t he f or e goi ng r e a s ons t he j udgme nt of t he Tr i a l

Co u r t i s a f f i r me d a nd t he c a us e r e ma nde d f or s uc h f ur t he r

p r o c e e d i ngs a s ma y be ne c e s s a r y a nd c ol l e c t i on of c os t s be l ow.

Co s t s o f a ppe a l a r e a dj udge d a ga i ns t M . W s ha m. s or

_______________________________ Hous t on M Godda r d, P. J . .

CONCUR:

_ _ _ _ _ _ _ _________________________ Do n T. M M r a y, J . c ur

10 _ _ _ _ _ _ _ _________________________ Ch a r l e s D. Sus a no, J r . , J .