FILED

March 1, 1996

Cecil Crowson, Jr.

Appellate Court Clerk

I N THE COURT OF APPEALS OF TENNESSEE

EASTERN SECTI ON

DONALD L. TATUM a nd ) HAMI LTON COUNTY

DOROTHY R. TATUM ) 03A01- 9507- CH- 00219

)

Pl a i ntif f s - Appe lle 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 )

)

 and )

)

FREDA J OHNSON MI CHEL )

)

De f e nda nt , )

Cr os s - Pl a i ntif f / Appe lle e ) AFFI RMED AND REMANDED

 

WI LLI AM G. SCHWALL OF CHATTANOOGA FOR APPELLANT

MI CHAEL A. ANDERSON OF CHATTANOOGA FOR DONALD L. TATUM a nd

DOROTHY R. TATUM

W. FRANK BROWN, I I I , OF CHATTANOOGA FOR FREDA J OHNSON MI CHEL

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

pe r f or ma nce of a l a nd s a l e agr eeme nt and da ma ge s . Mr . and Mr s .
2

Ta t um a me nde d t he i r c ompl a i nt t o j oi n Fr e da J ohns on Mi c he l , a

s e c ond 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 , Ms .

Mi c he l f ile d a c r os s - c l a i m a ga i ns t Ms . Wor s ha m, p r i nc i pa lly

s e e ki ng 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

mor t ga ge whi c h wa s i n di s put e .

Ms . Wor s ha m a ppe a l s a j udgme nt of t he Ha mi l t on Count y

Cha nc 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 ont 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 vor of Mr . a nd Mr s . Ta t um. Ms . Wor s ha m a l s o a ppe a l s a

de 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 

gr a nt i ng 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 ngs

of 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 .

Rul e 13( 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 .

Ms . Wor 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

of t hi s di s put e f r om Fr e da J ohns on ( now Fr e da Mi c he l ) i n 1993.

At tha t time , Ms . Mi c he l, who now r e s i de s in Fl or i da , h e l d a

s e c ond mor t ga ge on t he pr ope r t y. On Nove mbe r 13, 1993, Ms .

Wor s ha m ent e r e d i nt o a Real Es t a t e Sa l e s Agr eeme nt wi t h Mr . and

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

f ol l owi 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 he t e r ms of t hi s agr eeme nt , t he Se l l e r s s ha l l ha ve t he

r i ght ( 1) t o el ect t o decl a r e t hi s cont r act cancel 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
3

t he m a s liqui da t e d da ma ge s , o r ( 2) e l e c t to a f f i r m thi s

c ont r act and enf or ce i t s s peci f i c pe r f or ma nce or

r ecove r da ma ge s f or i t s br each. I n t hi s cas e , t he

de 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

on t he da ma ge s r ecove 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

pa 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 . 

The c ont r a c t a l s o pr ovi de d t ha t Ms . Wor s ha m woul d ma ke r e pa i r s

r e qui 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 ear a nce l e t t e r . 

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

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

pl a c e on 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.

The 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 Ms .

Wor s ha m. Ms . Wor 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 nde d

wa s becaus e s he wa s t hr eat e ne d wi t h a l a w s ui t by couns e l f or t he

Ta t ums if s he f a ile d to a tte nd.

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

be c a us 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

mor t ga ge he l d by Ms . Mi c he l . Ms . Mi c he l wa s r e s i di ng i n Fl or i da

a nd di 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 Ms .

Wor s ha 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 nc e
4

of t he i r cont r act . Ms . Wor s ha m f i l e d a cr os s - c l a i m aga i ns t Ms .

Mi c he 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 ge

he l d by Ms . Mi c he l. Ms . Mi c he l c ount e r - c l a i me d. 

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

unr e a s ona 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 he i r agr e eme nt . Spe c i f i c a l l y, t he Cha nc e l l or st a t e d, "t he

a ppr opr 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 or 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 ome t i me l a t e r Ms . Wor s ha m and Ms . Mi c he l can r e s ol ve

wha t e ve 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 he

a ppr opr i a t e act i on. " The Cha ncel l or gr a nt e d s peci f i c pe r f or ma nc e

of t he 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 ums 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.

The Cha ncel l or al s o di r ect e d t ha t a de t e r mi na t i on be ma de as t o

t he va l ue of Ms . Mi 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

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

Cha nc 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 Cour t

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

Ms . Wor 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

Mr . a nd Mr s . Ta t um a nd thr e e a s to Ms . Mi c he l. We will a ddr e s s

e a c h i n t ur n.

Ms . Wor s ha m f i r s t a r gue s tha t the Tr i a l Cour t e r r e d in

f a i l i ng 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 ont 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,
5

1993, or , 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 ntia lly, Ms . Wor s ha m is a r gui ng tha t time wa s of the

e s s e nc 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 he da t e s peci f i e d i n t he cont r act , t he Ta t ums t e r mi na t e d t he

c ont r act .

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 es s e nce by t he t e r ms of t he agr eeme nt . He r eas one d

t ha 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

not s pe 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 by

t ha t da t e . 

We agr ee wi t h t he Cha ncel l or t ha t t i me wa s not of t he

e s s e nce of t hi s cont r act . I t i s t he l a w i n Te nne s s ee t ha t t i me

i s not of t he es s e nce of t he cont r act unl e s s s peci f i cal l y ma de of

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

by t he 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 .

Comme r c e St r e e t Co. v. Goodye a r Ti r e & Rubbe r Co. , 31 Te nn. App.

314, 215 S. W. 2d 4 ( 1948) . Ms . Wor s ha m a r gue s t ha t t he t i me of

pe r f or 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 ve 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 da t e and t he f act t ha t t he cont r act di d not s t a t e t ha t

t he c ont 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

da t e , we agr ee wi t h t he Cha ncel l or and ar e una bl e t o conc l ude

t ha t t i me wa s ma de of t he es s e nce by t he pa r t i e s i n t he i r

c ont r a c t or by t he i r a c t i ons .
6

Ne xt , Ms . Wor s ha m a r gue s t ha t t he Tr i a l Cour t e r r e d by

r ul i ng 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 he s a l e on J a nua r y 28, 1994. The Cha nc e l l or f ound t ha t Ms .

Wor s ha 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 us e

t he a mount due on t he Mi c he l mor t ga ge wa s di s put e d. The

Cha nc 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 ng

t o do 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 nue

wi t h t he 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 mony

of t he 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 nua r y 28.

Ne xt , Ms . Wor 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 pe 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 , Ms . Wor 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

uni que 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 dy. I n doi ng s o Ms . Wor s ha m ha s of f e r e d pr oof t ha t t he r e wa s

ot he r pr 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 of

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

We be l i e ve t ha t Ms . Wor s ha m mi s c ons t r ue s t he l a w of

s peci f i c pe r f or ma nce. "[ S] peci f i c pe r f or ma nce i s r e ga r de d as

a ppr opr 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 pr 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 ha n not , 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 Ent e r pr i s e s , Inc . v . Da vi s, 797 S. W. 2d 606 ( Te nn. App. 1990) .

As e vi de 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 not uni que , Ms . Wor s ha m doe s not r e a l i z e t ha t by i t s ve r y
7

na t ur 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 nne s s e e c our t f i ndi ng, e xplic itly or implic itly, tha t a pi e c e

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

s uc 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 hi 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

pr ope 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 ocat e d acr os s t he s t r eet f r om a gol f cour s e whe r e Mr . Ta t um

pl a ys 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

uni que s peci f i c pe r f or ma nce i s al wa ys an ava i l a bl e r e me dy. Ms .

Wor s ha m c or r e c t l y c i t e s a ut hor i t y f or t he r ul e t ha t s pe c i f i c

pe r f or 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 ne qui 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 ol d B. Gilmor e , e t a l . , a n unpubl i s he d opi ni on of t hi s

Cour 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

Fune r al 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 ont r act f or t he s a l e of r eal pr ope r t y whe r e an el de r l y s e l l e r ,

not r e pr 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,

nonr e c our 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 .

Ms . Wor 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,

oppr 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.

Thus , 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 peci f i c pe r f or ma nce t o be t he appr opr i a t e r e me dy i n t he pr e s e nt

s i t ua t i on. 
8

Ms . Wor s ha m al s o as s e r t s t ha t t he Cha ncel l or er r e d i n

a wa r di ng 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 ha t becaus e t he s a l e di d not cl os e , t he Ta t ums wi l l be f or ced t o

pa y t he 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

30 ye 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 .

The Cha 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

di f f e r e nt i a l . He al s o awa r de d t he m va r i ous expe ns e s as 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 nc ur r e d ha d Ms . Wor 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 he 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 de 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 ee cour t s ha ve awa r de d mone t a r y da ma ge s al ong

wi t h t he s peci f i c pe r f or ma nce of a r eal es t a t e cont r act .

A decr ee f or s peci f i c pe r f or ma nce s e l dom br i ngs

a bout 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 pect , s uc h a decr ee i s near l y

a l wa ys a decr ee f or l e s s t ha n exact and compl e t e

pe 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

de 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

da ma ge s wi l l be awa r de d al ong wi t h t he decr ee f or

s peci f i c pe r f or ma nce. 

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

The a ddi 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 he Ta t ums we r e t he nor ma l and f or e s eeabl e cons e que nce of Ms .

Wor s ha m' s br each.

Ms . Wor s ha m a r gue s t ha t t he Ta t ums ha d a dut y t o

mi t i ga 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
9

of Te nne 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

mitiga t e da ma ge s . In light of the f a c t tha t we ha ve he l d tha t

r e a l pr ope r t y i s uni que a nd be c a us e we ha ve f ound t ha t t he Ta t ums

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

r e qui 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

da ma ge s .

Ms . Wor 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 f a i l i ng

t o gr a nt a j udgme nt a ga i ns t Ms . Mi c he l . Ms . Wor s ha m a r gue s t ha t

Ms . Mi 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 mount

owe d Ms . Mi c he l a nd t he r e a f t e r de ma nde d a hi ghe r a mount . Ms .

Wor s ha m t hus a r gue s t ha t Ms . Mi c he l s houl d be pe na l i z e d unde r

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 nd unr 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

pr ope r t y.

Ms . Wor s ha m a l one s ubmitte d e vi de nc e a t tr i a l a s to the

a s s e r t e d agr eeme nt . She admi t t e d t ha t i t wa s not r e duced t o

wr i t i ng. By f i ndi ng f or Ms . Mi c he l, t he Cha nc e l l or , by

i mplic a tion, d i s c r e dite d Ms . Wor s ha m' s te s timony or f e lt tha t the

a gr e e me nt r e qui r e d a wr i t i ng. Ms . Wor s ha m of f e r s no f a c t ua l

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

 

Ms Wor 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 di ng

Ms . Mi 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

a nd t he de e d of t r us t . Ms . Wor s ha m a r gue s t ha t a t t or ne y' s f e e s
10

s houl 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 ur 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 on

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

Ms . Wor s ha m a nd Ms . Mi c he l wa s t he a mount due on t he not e .

At t or ne y' s f ees ar e a di s c r e t i ona r y r e me dy and we ar e not

i nc l i ne 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, Ms . Wor 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 dmitting int o e vi de nc e a le tte r f r om Ms . Mi c he l ' s a ttor ne y in

vi ol 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

Rul e s of Evi de nce. The l e t t e r wa s obj ect e d t o at t r i a l by

c ouns e l f or Ms . Wor s ha m a nd t he obj e c t i on wa s s us t a i ne d.

Howe ve r , t he r ecor d s hows t ha t t he l e t t e r wa s admi t t e d. The r e

ha s be 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

Cha nc 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 ue s de c i de d a nd wa s t hus 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

Cour 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

pr oc e e di 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.

Cos t s of a ppe a l a r e a dj udge d a ga i ns t Ms . Wor s ha m.

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

CONCUR:

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Don T. Mc Mur r a y, J .
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Cha r l e s D. Sus a no, J r ., J .