### IN THE COURT OF APPEALS OF TENNESSEE AT KNOX VILLE Fe br ua ry 13, 200 8 S es sio n LARRY THORNTO N v. J OE MARCUM, an d w ife , MONA MARCUM

Direc t Appeal from the Chancer y Court for Cam pbell Cou nty

No. 05-166 Hon. Bill y Joe White, Judge

No. E2007-01326-COA- R3-CV- F ILED MARCH 31, 2008

Pla int if f a nd de fe nd ants e nte re d into a ve rb a l a g re e me nt whe re in p la int if f w ou ld p ur c ha se tw o lo ts from the de fenda

nts at an ag ree d price . Plaintiff ma de pay ments as ag ree d over a

period of time, but befor e the lots wer e complete ly paid for de fenda

nts sold one of the lots to a t h i rd p ar t y . Plaintiff broug ht this action for spec ific per formanc e and the Trial Court ruled that t h e v erb al ag ree ment violated the Statute of F rauds. How ever , the Trial Court invoke d the theory of equitable estoppel ag ainst defe ndants, order ed spec ific perf ormanc e, and awa

rded damag es for the lot sold, which wa s pa rt of the purc ha se a g re e me nt. On a pp e a l, w e a ff

ir m.

Te nn. R . A pp. P .3 App e al a s o f Rig ht ; J udgm e ntof t he Cha nc e r y C our t A ffirm e d.

H ER SCH EL P I CKE N S F RAN KS , P.J ., delivere d the opi nion of t he C ourt, in which D. M I CH A EL S WI NEY , J ., and S HAR ON G. L EE , J ., joined.

Johnny V. Duna wa y , L a F oll e tte , T e nn e sse e , f or a pp e lla nts

. Reid Troutman, L aF ollette, Tenne ssee, f or appe llee.

OP IN ION

T h is is e s s e n ti a ll y an a c ti o n to e n f o r c e an o r a l c o n tr a c t to p ur c h a s e land, whe rePla int if f m a de a g re e d p ay

me nts fo r t

hr e e y e ars
. 1
-2- plaintiff had made installment pay ments on the agr eed pur chase price

. At the conc lusion of the 1 pr oo f, the Tr ia l Co ur

t f ound that th e pa

rt ie s h a d r e a c he d a

ve rb a l a greemen t, sp ecif ic in t e rm s, relative to the sale of two lots, a nd order ed spec ific per formanc e of the ag ree ment with one lot, and awa rded da mag es of $11,000.00 f

or the other

lot, which the def

endants ha d later sold.
The Court found that the f acts we re c lear that the parties had negotiate d a dea l for the purcha se of the two lots for $28,000.00, and that a c ontrac t was dra wn up, but not signe d. The Court found that in April of 2005, someone trespasse d on the land and c aused a g ood deal of dama g e, and at that point plaintiff rec eived a letter fr om defe ndants' attorney saying the contra ct had be en canc elled. The Court found that t h e s o l e p urpose of this attempted canc ellation was " for the fra udulent intent of obtaining more money from anothe r pur ch aser. Ithink that ag ree ment was alre ady made and the defe ndant wanted to g et title ba ck to these two lots for the purpose of selling t h em fo r al ar ger

am o u n to f m o n ey
. " T h e e v i d en ce d o es n o tp re p o n d er at e a g a i n s t th e C o u rt 's finding s of fa ct. Tenn. R. App. P. 13(d).

The Tr ial Court then observe d t hat the Statute of F rauds would a pply , but that the equitable e stoppel exception would also apply , such t hat t he parties’ agr eeme nt should be enfor ced de sp ite the fa c t th e wr iti ngwa s n e ve r s ig ne d. De fe nd ants a pp e a le d a nd ra ise d th e se iss ue s: 1. Did the Trial Court err in a pplying the equitable e stoppel exception to the Statute of Fr auds def

ense?
2. Di d the a

pp e lle e have the re qu isi te sta nd ing to b ri ngsu it a g a ins t a pp e lla nts ?
The Tr ial Court found that the Statute of F rauds would a pply , since the a g ree ment involved a sale of re al prope rty . Tenn. Code Ann. §29-2-101( a). There is no dispute in thi s case that the pa rt ie s h a d n o w ri tte n c on tr a c t sig ne d by de fe nd ants , an d thus pla int if f, un de r t he statut e , w ou ld be bar red f rom bring ing a

n action base d on the par ties’ ver bal agree m en t fo r the purc hase of the su bje c t lo ts.
Th e Tr ia l Co ur t f ound , how e ve r, that the e qu ita ble e sto pp e l exce pti on to t he Statut e of F rauds should be a

pplied based on the fac ts of this cas e. T h e Tria l Court relied on Autry v. Boston , J r. , e t al

. , 2 0 0 6 W L1 1 3 2 0 7 5 ( T e n n
. C t

. Ap p
. Ap r
. 2 8 , 2 0 0 6 ) , a u th o r e d b y J u d g e S w i n e y, wh e re the Court

inv ok e d e qu ita

ble e sto pp e l to a llo w s pe c if ic pe rf or manc e of a

ve rb a l a g re e me nt t o purc ha se a

ho us e , w he re the purc ha se r a nd his de c e a se d w if

e (who wa s th e da

ug hte r o f d e fe nd ants ) had paid a

$2,000.00 down pay

men t , and had renovated the house at a substantial expense. The sellers rene g ed on the deal afte r their daug hter passed awa y , but the Trial Court he ld the contra ct was valid and enf

orce d it, based on the doc trine of e quitable estoppel.
As thi s Co ur

t ha s p re vio us ly

re c og nize d:-3- the purpose of the Statute of Fr auds is not to allow a par ty to avoid ag ree ments he or she has made

. Co bb le v . L angfo rd , 190 Tenn. 385, 390, 230 S.W.2d 194, 196 (1 95 0)

. I t ha s lo ngbe e n r e c og nize d in our c ourt s th a t st

ri c t a pp lic a tio n o f t

he Statut e of F ra ud s c an le a d to e vil s a s und e sir a ble a s tho se it wa s de sig ne d to lim it o r p re ve nt. Southern States Dev elopment Co., Inc . v. Robinson , 4 94 S.W. 2d 77 7, 78 1 ( Te nn . Ct

. Ap p. 19 72 ). Con se qu e ntl y , it " sh ou ld n ot b e us e d to avo id c on tr a c ts o r t o g ra nt a privileg e to a p er son to refuse to perfor m what he ha s ag ree d to do." GRW Enterprises, Inc. , 7 9 7 S

. W

. 2 d at6 1 1 , q u o t i n g Cob ble , 190 Tenn. at 390, 230 S.W .2d at 196. Neither

should its enforce ment re n d er it "an instrument of hardship and o p p re s s i o n
. " I d

. , ci t i n g Baliles , 578 S.W .2d at 624.
I n o rd e r t o p re ve nt s uc h r e su lts , o ur c ourt s h ave he ld t

hat in so me c ir c ums tanc e s a pa rt y is es top pe d to ass e rt the Statut e of F ra ud s to avo id c on tr a c tua l un de rt akin g s in the intere st of equity

and fa i rness. Estoppel ba sed on principles of equity may be applied in a number o f si tuations, including to pre clude a ssertion of the Statute of F ra ud s to avo id a

n a g re e me nt t o tr ans fe r r e a l pr op e rt y , a nd is g e ne ra lly de sc ri be d a s:

.. . th e eff e c t of the vo luntary

c on du c t of

a pa rt y wh e re by he is a bs olute ly prec luded, both at law a nd in equity , from asse rting rig hts which mig ht p e r h a p s h av e o t h e r

w i s e e x i s t e d , e i th e r

o f p r o p e rty, o f

c o n tr a c t , o r

o f r e m e dy, a s a g a ins t ano the r p e rs on , w ho ha s in g ood faith r e lie d u

po n s uc h c on du c t, and ha s b e e n le d th e re by

to c ha ng e his po sit ion

fo r t he wo rs e , a

nd wh o o n h is part a cquire s some corr esponding rig ht, either of proper ty , of contra ct, or of reme dy

. Beazley v. Turgeon , 7 7 2 S

. W

. 2 d 5 3 , 5 8 (T en n
. C t

. Ap p
. 1 9 8 8 ), qu o t i n g Church of Chr ist v . M c Do na ld , 1 71 S.W. 2d

81 7, 82 1 ( Te nn .1 94 3) . T he purp os e of e qu ita ble estoppel and its objective a re:
... to preve nt the unconscientious and inequitable assertion or e nforc ement of claims or rig hts which mi g ht have exi sted, or been enfor cea ble by other rule s of law, u nless preve nted by an estoppe l; and its practica l effe ct is, from motives of equity

and fa ir dea ling, to cr ea te and ve st opposing rig hts in the party who obtains the bene fit of the estoppe l.
Baliles , 578 S.W .2d at 624.
Sm ith v . S

mi th , 2 005 W L 31 32 37 0 ( Te nn . Ct . App . N ov . 2 2, 20 05 ). Our S up re me Court ha s a lso stated:
The a

ppellate courts of t his state consist ently have refuse d to enforc e an or al contra ct for the sal e o f l an d on the basis of pa rt perf ormanc e alone

. Knight v. Knight , 222 Te nn . 3 67 , 4 36 S .W .2 d 289 (1 96 9) ; Goodloe v. G oodloe , 1 1 6 T e n n
. 2 5 2 , 9 2 S. W.-4- 767 (1905). And, it is now a rule of prope rty in this st ate that pa

rt perf ormanc e of a parol c ontrac t for the sa le of land w ill not t ake the ag ree m en t o u t o f the Statute of Fr auds. Goodloe v. G oodloe , su pra . The ha

rshness of this rule ha s been mitig ated by the a pp lic a tio n o f t

he do c tr ine of e qu ita

ble e sto pp e l in e xce pti on a l ca se s whe re to enfor ce the Statute of Fr auds wo u l d m ak e it an instrument of ha rdship and oppression, ver g ing on a ctual fr aud. Covington v. McM urray , 4 Tenn. C

. C.A. 378 (1 91 3) ; Ghee n v. Osborne , 58 T en n
. 6 1 (1872). See also Dec herd v. Blanton , 35 Te nn . 3 73 (1 85 5) ; W

illiams v. Conrad , 3 0 T e nn . 4 12 (1 85 0) ; B lo o m s te in v . Clees Br oth e rs , 3 Te nn .Ch . 4 33 (1 87 7) ; Interstate Co. v. Bry-Block M ercan ti leCo. , 30 F.2d 172 (D.C.W.D.Tenn.) ( 1928).
"E q uitable estoppel, in the moder n sense, a

rises fr om the ' conduct' of the party , using that word in its broadest mea ning, a s includin g h i s s poken or written words, his positive ac ts, and his silence or ne g ative omission to do any thi ng . Its f

ound a tio n is jus tic e and

g oo d consc ie nc e . Its o bje c t is to preve nt the unconscie ntious and inequitable asse rtion or enf orce ment of claims or rig hts which might have exis ted, or be en enf orce able by

other rule s of law, unle ss preve nted by an estoppe l; and its practical eff ect is, fr om motives of equity

and fa ir dea ling, to cr eate and vest opposingrig hts in the part y who ob tai ns th e ben efi t o f t he es to pp el. " Evans v. Belmont Land Co. , 92 Tenn. 348, 365, 21 S.W. 670, 673-674 (1893).
Baliles v. Cities ServiceCo. , 578 S.W .2d 621, 624 (Tenn. 1979)

.

The burden of

proof is on the pa

rty seekingto invoke equitable e stoppel. Bokor v. Holder , 722 S.W .2d 676 (Tenn. Ct. App. 1986). The Trial Court found that plaintiff had shown the requisite ele ments of estoppel in this case , relyin g o n t h e defenda nts’ conduct in “c ance ling” the a g re e me nt. Th e Court ob ser ved that th e de fe nd ants se nt t he le tte r p ur

po rt e dly c anc e lin g the sa le “for th e frau du len t i nt ent of o bt ain in g mor e mo ney fro m an ot her p urch aser ."
Th e re is a c omp e lli ngre a so n th a t th e do c tr ine of e qu ita ble e sto pp e l is a

pp lic a ble to this case. De fenda

nts nev er d en ied that there was a n ag ree ment to sell the proper ty , and a c kn ow le dg e d th e y

ha d a n o ra l a g re eme nt wi th pla int if fs to b uy the pr op e rt

y , a nd that pa y me nts wer e made pursuant to this ag ree ment. De fe n d an ts chang ed their mind about the sa le, and the Chance llor conclude d this was beca use they could sell the prope rty

for more money

and they then told the plaintiffs they

would not follow throug h with the deal.
As we ha ve ofte n held, the basis of e quitable estopp el is that “once a par ty acts, or ref rains fr om acting , in suc h a wa y as to indicate a

n ag ree ment, and anothe r par ty rea sonably

relies on that indication of ag ree ment, the first par ty cannot late r asse rt a c ontrary pos ition”. See Smith. That i s what the defe ndants seek to do in this case
. They have admitted that an ag ree ment exis ted, allowed plaintiffs to re ly on the same, and acc epted $12,000.00 in pa y ments made pur suant to the ag ree ment by

plaintiff, and to allow de fenda nts such a windfa ll would be fundame ntally unfair.The Court adde d plaintiff’s wife as a pa rty plaintiff. 2
-5- The Tr ial Court properly

held that the equitable estoppel exception to the Statute of F ra ud s a pp lie s. As this Court has recognized: Specific pe rfor

mance is an equitable r emedy . I t is not ava ilable as a matter of rig ht but is dis c re tio na

ry wi th t he tr ia l c ourt de pe nd ing on the fa c ts o f e a c h c a se . Sp e c if ic perf ormanc e is not available unless the contract i s clea r, def inite, complete, and f

ree from any suspicion of fra

ud or unfa irness.
Court s d o n ot, a s a g e ne ra l matte r, awa rd sp e c if ic pe rf or manc e wh e n th e inj ur e d p art y c an b e fu lly

and a de qu a tely com pe ns a te d w ithdama g e s. Ho we ve r, sp e c if ic perf ormanc e is reg arde d as appr opriate when dea ling with contracts for the c on ve y anc e of

re a l pr op e rt

y be c a us e re a l pr op e rt

y is uni qu e , an d mo re of

te n th an n ot, an aw ard of

damag es is simply

not an ade quate r emedy

. GR W En te rp ris es, In c . v . D av is , 797 S.W .2d 606, 614 (Tenn. Ct .App. 1990)( citations omitt ed).
I t was withi n the s ound discretion of the C hance llor to awa rd spec ific per formanc e a s to the re ma ini nglot

and awa rd dama g e s to the pla int if

fs fo r t he los s o f t

he lot that ha d be e n s old to thi rd pa rt ie s by de fe nd ants

. Ho we ve r, pla int if f ha d no t pa id the fu ll purc ha se pr ic e fo r t he tw o lo ts and upon re mand, the plaintiff may deduct t h e d amag e aw ard f rom the amount he a g ree d to pay defe ndants for the proper ty , as plaintiff oblig ated himself to pay the purc hase pr ice.
Def e n d an ts a ls o ar g u e th a t p la inti f f h a d n o s ta n d in g to b r in g s u it

in th is ma tter be c a us e he ha d n o le g a l in te re st i n th e pr op e rt y , b a se d on the ir

a lle g a tio n th a t he did

no t pa rt ic ipate in the neg otiations nor expressed any “cle ar intent to have the contra ct oper ate f or his benef

it.” The Trial Court found , h o we v er , that Mr. Thornton wa s prese nt for the ne g otiations, that the chec ks which paid f

or this property

wer e paid f

rom a joint checkingacc ount, and that Mr. Thornton ha d an interest in this property

transac tion. The evidenc e does not pr eponder ate ag ainst this finding and

2 this iss ue is without merit.

I n sum, the Chancellor pr operly found that the e quitable estoppel e x ce p tion to the Statute of Fr auds would apply in this case , and we aff irm the dec ision of the Trial Court and r emand, wi th t he c os t of the a pp e a l a sse sse d to de fe nd ants

.

___________________________ H ER SCH EL P I CKE N S F RAN KS , P

. J.