# FILED February

28, 1996 Cecil W. Crowson Ap pellate Cou rt Clerk FIRST AM ERICAN T RUST COMP ANY, ) Executor of the Estate of ) Frances A. Oman, Deceased, ) ) Appeal No. Plaintiff/Appellee, ) 01-A-01-9507- CH-00324 ) VS. ) W illiamson Chancery ) No. 22922 FRANKLIN-MURRAY DEVELOPMENT ) COMPANY, L.P., ) ) Defendant/Appellant. )

COURT OF APPE ALS OF TENNESSEE MIDDLE SEC TION AT NASHVILLE APPEALE D FRO M THE C HANC ERY C OURT O F WILLIAMSON COUN TY AT FRANKLIN, TENNESSEE THE HONORABLE HENRY D ENMARK BELL, JUDGE CHARLES A. TR OST JOSEPH A. W OODRUFF 511 Union Street , Suite 2100 Nashvil le, Tennessee 37219- 1760 THOMASV. WHITE 315 Deaderick

Street, 21st F loor Nashvil le, Tennessee 37238 Attorneys for Plaintiff/Appelle e JOHN A. DA

Y DONALD CAPP ARELLA 150 Fourth Avenue North Nashvil le, Tennessee 37219 GUY C. N ICHOLSON 2049 Century

Park East, Su ite 755 Los Angeles, CA 90067 Attorneys for Defendant/Appellant

AFFIRMED AND REMAN DED

BEN H. CAN TRELL, JUDGE CONCUR: TODD, P.J., M .S. LEW IS, J.- 2 - 

## O P I N I O N

The ChanceryCourt of Williamson County awarded theearnest money in a real estate transaction t o the seller, finding that th e purchaser had breached the c ontract. On ap pea l the purc hase r con tend s tha t the selle r fai led t o del ive r a marketable title and that there are fa ctual disputes that preclude granting summary judgment to the s eller. We affirm the trial co urt’s decis ion.
I.
First Amer ican Trus t Com pan y (FAT C) is the d uly appointe d executor under the wil l of Frances A. Oman, who d ied on May 29, 1992. Ms. Oman d ied owning several large tracts of valuabl e real proper ty, some of w hich had to besold to pay estate tax

es. On Ap ril 14, 1994 Franklin- Murray Deve lopme nt, L.P. (FM D) entered i nto an agreement topurchase a 224 ac re tract i n Brentwood for $1,000,000 down and a $4,750,000 note secured by a deed of trust. The a greement call ed for the payment of earnest money to an esc row age nt and a closi ng date wi thin six ty days . FATC was obligated to furnish goo d and marketable ti tle to the property . If certain contingencies had not been met by the original closing date the closing could be extended up to six ty additional days. Othe rwise, time was made of the e ssence wit h respect to each party’s obligations.

The transaction did not close within the time prov ided in the ag reement. Althou gh the parties ne gotiated a modi fication of the amoun t of the down pay ment, they re main ed at odds over FATC’s propos al to satisfy the estate tax

lien. On October 3, 1994 FATC filed an action in theChancery Court of Williamson County- 3 -

seeking a declaratio n that it was entitled to the earnest money because FMDhad breached the a greem ent b y f ail ing to clo se. On November 9, 1994 FMDfiled an answer and countercla im seeking damages from FATC for breach ing the contract by failing to furnish goo d and marketable ti tle. FMD also recorde d a lis pendens lien to secure the pay ment of its antici pated judgment.

FATC moved to h ave the court remove the lis pendens lien beca use FMD was seeking only d ama ges an d was n ot as sert ing an inte rest in th e pro pert y. After a hearing, the chancellor declined to remove the lie n and recited i n a December 14, 1994 order that “counsel for bot h s ides asse rted during oral arg ument that they were sti ll w ill ing to c los e thecont rac t if t he ot her sid e wa s re ady to pe rfo rm all its obligations .” On January 19, 1995 FATC moved the court f or an order of specific performance. The motion assert ed that FATC was ready and willi ng to transfer unrestrict ed and unencumbere d title to FMD. In sup port of the motion FA TC filed documents showing that the IRS and t he Tennessee Department of Revenue had agreed to waive their tax liens becauseFATC had prov ided securit y for the pay ment of any tax due. The security provided for the IRS was a $4,000, 000 surety bon d and a promise to pay the IRS the entire $1,00 0,000 down payment. Afte r giving FMD additional timeto respond to FATC’s motion, thecourt entered an order on Mar ch 6, 1995 granting specific perfor mance to FATC and ordering that the sale be closed on March 28, 1995. The court further ordered that if FMD coul d not close on t he date specified it must

release its

lis pendens l ien.
FMD did not close on the appointed date . FATC then filed a motion for summary judgment on the merits of the caseand the court entered a final j udgment dismissing FMD’s counterclaim and awarding the earnest mone y to FATC.1 W hether an inci pient

esta te tax lien ren ders title to prop erty un m ark etab le wh ere th e lien is to be di schar ged by

the sal e pro ceeds i s an i nte rest in g quest io n, b ut o ne we wi ll not addr ess now. - 4 - II.
Boil ed down t o its f und ame ntal s, th is cas e tur ns on the a nswer to two questions: (1) Did t he chancery court commit r

eversibl e error in its March 1995order ordering the parties to perform the contr act? and (2) Was FATC entitled to summary judgmentholding that FMD br eached the contrac

t? We think the uncontradicted facts show that the court properly decided both issues.

FMD defended the origi nal action and based its counterclaim on the f act that the tax li en rend ered the t itle unm arke tabl e. W heth er FMD coul d have prevail ed on thattheory has

now passed into history and we take no position w ith respect t o that question. 1 When FMD represented to t he court that i t was sti ll read y and wil ling to close the trans actio n if FATC could fulfil l all its obligatio ns, it waived any prior objectionsbased on the failure to furnish marketable title i n a timely fashion. Waiver is the voluntar

y sur re nder of a known right. Felts v. T ennessee Consoli

dated Retirem ent

System , 65 0 S.W.2 d 371 (1983). Al though FMDnow qui bbles wi th the chancellor’s “findin g” that FMD to ok a position in favor of clo sing the tr ansaction, the chancellor’s order reci ting that fact wen t unchalle nged until FATC took the steps necessaryto remove t he tax lien. The uncontradicted facts show that FMD waived any rig ht it had to re ly on the “ time is of the ess ence” prov ision in the contract.
When timeis n o lo nge r of t he essence the parties have a reason able time in whic h to close. Miller v . Resha , 820 S. W.2d 357 (Tenn. 1991). FATCmoved for an order of specific

performance wi thin thirty-six day s of the December 14, 1994 order. With the agreement of the IRS and the Tennessee Department of Revenue to waive their claims for taxes, FMD’s o nly object ion to closi ng had been res olved.- 5 -

Therefore, the chancellor was justified in order ing performance in accordance with the parti es’ ea rlie r repr

esentationsthat t hey were w illi ng to perfor m.

III.
It is important to note that ultimately the chancellor did not order specific performance. The final disposi tion of the case came when FATC moved for summary judgmenton the merits of its conten tion that FMD breached the contract . So, in actuality the March 6, 1995 order merel y set a date certain for the closure.
When that date passed an d FMD was unable or unw illing to close, FATC moved forsummary judgment. W e think the uncontroverted f acts show that FMD breached the contract . As we have pointed out, the only def ense raised to FATC’s action was the fact that the tax lien c loude d the title to the property . FATC was prepared to delive r title on M arch 28, 1995 free and clear of all t ax li ens. Th us, FA TC was entitl ed to summary j udgment on the bre ach of contract i ssue.
IV.
FMD arguesthat the order of March 6, 1995 w

as in the alter native; that it gave FMD t he option o f closing or releasing its lis pendens lien. Even if FMD is corr ect on that point there is nothing in the pa pers supporting the motion indic atin g that FATC had elected to accept a re lease of the lien in l ieu of all other remedies. Simi larly, there is nothing in the court’s order restricting FATC’s remedies to a release of the lien. The court’s order of March 6, 1 995 specifically reserved “all other matters” after orderinga closing on March 28, 1995 or a releas e of the lien.- 6 - The judgment of the lower court is affirmed and the cause is remanded to the Chancery

Court of Williamson Coun ty fo r any f urth er pro ceed ings n eces sary. Tax the costs

on appeal to the appe llant.

_______________________________ BEN H. CAN TRELL, JUDGE

CONCUR:

_______________________________ HENRY F . TODD, PRESID ING JUDGE MIDDLE SEC TION

_______________________________ SAMUEL L. LEWIS, JUDGE