# FILED
December20, 1995 Cecil Crowson, Jr . App ellate C ou rt Clerk IN THE COU RT OF A PPEA LS OF TENN ESSEE WESTERN SECT ION A T JA CKSON
DONA LD L. MOT

T, ) MURL KENNA MORE, and ) K & M PETR OLEUM COR P., ) ) Plaintiffs/App ellees, ) Fay ette Chanc ery N o. 10018 ) VS. ) A ppeal No. 02A 01-9410-CH- 00244 ) D. DEAN GRA

VES and SECURITY ) TITLE INSU RA NCE CO., IN C., ) ) Defendants/Appellant )
APPEAL FROM THE CH ANCER Y COU RT OF FAYETTE COUN TY

AT SOMERVILLE, TEN NESSEE THE HONORABLE JOHN HILL CHISOLM, C HANCELLOR

ROBERT B. C. HA LE WAR ING COX Memphis, Tennessee Attorney for Defendant/Appellant G raves
H. MORRISDENTON DENTON & CA RY Bolivar, Tennessee Attorney for Plaintiffs/Appelle es

AF FIRMED

AL AN E. HIGHERS , JUDGE
CONCUR: W. FRA NK CRA

WFORD, P.J., W.S. DAVID R. FA RMER, JUD GE

Appel lant D . Dean Graves ("Grav es") appeals thechancellor' s decision r equiring2

Gravesto specifical ly perform a contract by purchasing an $8 5,0 00 parcel of real estate offered for sale by the Appellees, Donald L. Mott ("Mott") a n d Murl Kennamore ("Kennamore").

The facts of this case are largel y undisputed. On Septem ber 11, 1991, Graves entered into a contrac

t with M ott and Kennamore to pu rchase 10.7 acr es of unimproved real property located in Fayette County, Tennessee. The property was ori ginally

owned byK & M Petrol eum, Inc., a now defunct corporation of which Mott and Kenn amore were sole shareholders. As originally executed, the contract gave Graves the option to purcha se the entire 10.7 acre parcel for $85 ,000. The contract provided th at closing would take place nine months after Graves deposited $1,000 ear nest money in escrow.

On March 24, 1992, the parties ag reed to exec ute an amendment to the ori ginal contract. Under

the terms of the amended a greement, Gra ves had the option to sel l one
acre of the 10.7 acre parcel prior to closing on the entire pa r cel. The l anguage of the contract amendment pr ovided in pe rtinent part: (b) Section 2. Place and Time of Closing. Shall be a mended as follows: The current paragraphs (a) a nd (b) shall be deleted, and the following inserted. (a) Subject to the conditions herein having been met or waiv ed, the Closing will take plac e on o r bef ore J anu ary 1 , 1993, o r the first w orking day thereafter, at th e of fice s of the c losin g atto rney. At Purchaser's sole option, Purchaser

may close and/or assig n his interes t (as defin ed by this agreement), in a one acre parcel locat ed at the int er section of Hig hway 57 and High way 18 prior to the scheduled clos ing of the w hole property as noted above. In the event Purchaser does close and/or assign his interest in the one acre parcel, the total sum of Twenty Thous and Dollars ($20,000) shall be e ntered into escrow from the sale and/or

assignment as

the total proceeds of Purchaser's resale of the parcel (an d /or assignment of his interest in the parcel ), and be appli ed to P urchaser's account at clos ing of the b alan ce of the p rope rty. (b) In the event Purchaser clos es the one acre a nd escrow s the additional m one y, Purchaser shall automatically waive the conditions of Pu rchaser' s obligations

on the balance of the p roperty , in Sect ion 7, paragr aphs (a) Utilities, (b) Inspections, (c) Zoning/Us e, (g) Per mits, and (k) Financing , and closing of the one acre parcel shall serve as Purchaser's notice to close the balance of the proper

ty as req uired in paragraph (a) above of this s ection. All other terms and conditions of the agreement shall remain in f ull force and effect.
In a letter dated October 16, 19 91, Graves contacted Thom as S asser, ow ner of Sasser Oil Company

and a distri butor for Exx on, in an effort to sell the single acre. It is3

evident from Graves' correspondenc e to Sasser, aswell as from Graves' testimony at trial, that Graves' original intention was to purchase all and develop most of the 10.7 acre si te. Gravessold the one acre parcel to Sasser on A pril 24, 1992, for $60,000. Accor ding to the terms of the amended ag reement, Graves placed $18,169.81 from the sale of the single
acre in escrow. That sum was to be applied to Graves' account upon th e sale of the balance of the proper

ty.

It is at this juncture in t he parties' t ransaction that a dispute arose. T here is no qu estion that on January 1, 1993, the date es tablished for cl osing the ba lance of th e prop erty, Graves fail ed to close. G raves admit s that he breache d the parties' contract, but argues that the Appellees' sole reme dy is set forth in the contract's liq uidated dam ages clause. That clause states: Section 9. N on-perfo rmance. (b) If Purchaser defau lts, Seller and Purchaser agree that it will be extremely difficult or impracti cal to fix Seller 's actual damag es. Therefore, the Earnest Money shall be delivered toSel ler as l iqu idat ed da mage s for los s of a bargain and not as a penalt y. Purcha ser wil l then be relea sed fro m a ll liability to Sel ler related to thi s Agreement, such l iqui dated da ma ges be ing Seller's s ole remedy.
Mott and Kennamore argue that, pursuant to the t erms of the amended contr act, Gravesbecame bound to close on the balance of th e 10.7 acre parcel after heexercis ed his option to sell the single acre. The Appe llees further co ntend, an d the lower court so found, that Grave s' failure to close on the balance of the pr operty enti tles Appellees to t he remedy of speci fic performance. In support of their arg ument, Mott and Kennamor e cite the language of the contract amendment : "Subject to the conditions

herein hav ing been met or waived, the Closing will take place on or before January 1, 1993. . . . In th e event Purchaser

does close . . . his interest in this one acre parcel, thetotal sum of . . .$2 0,000 shall be entered into escrow from the sale . . . and be applied to Purchaser's account a t closing of the balance of the pr operty." The amendment also states : "closing of the one acre parcel shal l serve as Purchaser' s notice to cl ose the balance of the property a s required i n paragraph ( a) above of thi s section."

The interpretati on of a writt en agreement is a matter of law

and not of fact. APACTennessee, Inc. v. J .M. Humphries Const. Co. , 732 S.W.2d 601 (Tenn. App. 1986). T hus,4

this Court's s cope of review is de novo upon the record with no presumption of correctness of the trial court's concl usions oflaw. Adams v. Dean Roofing Co. , 715 S.W.2d 341 (Tenn. App. 1986).

It is wel l establishe d that the cardi nal rule for i nterpr etat ion of contracts is to ascertain the intention of the parties and togive effect t o that intention consistent w ith legal principles. Rob Pearsall Motors, Inc . v. Reg al Chrysler-Ply mouth , Inc. , 521 S.W.2d 578 (Tenn. 1975 ). A pr imar y obje ctive in the constructi on of a contract i s to discover the intention of the parties from a consideration of the whole c ontract. McKay v. Louisv ille & N. R. R. Co. , 133 Tenn. 590, 182 S.W. 874 (1916). In construing contracts, t he words expressi ng the parties' intentions sh ould be given their usual , nat ural and o rdinary meani ng. Taylor v . White Stores, Inc. , 707 S.W.2d 514 (Tenn. App. 1985). In Hamblen County v. City o f Mor risto wn , 656 S.W.2d 331, 334 (Tenn. 1983), the Tennes see Suprem e Court stated: 'The court in i nterpreting wordsor other acts of the parties puts itself in the posit ion whic h they occupi ed at the time the contract was made. I n applying the appropriat e standard of inte rpretation even to an ag reement that on it s face is free from ambiguity

it is permi ssible toconsider the situation of the parties and the accompanying circumstanc es at the time i t was entered into- -not for

the pur pose of mo difyin g or enlarging or curtailing its terms, but to aid in determi ning the meaning to be given to the agreement.' Restatementof Contracts , § 235(d) and Comment. ' . . . Intenti on or meaning i n a contract may be manifested or conveyed either expressly or i mpliedly, and it is fundamental that which i s plainly

or necessar ily impl ied in the lang uage of a contract is

as much a part of it as that whi ch is expr essed. If it can be plai nly seen from al l the provisi ons of the instrument t aken together that the obligati on in questi on was w ithin the contemplation of the parties when making their contract oris necessary to carry

their intent ion into effect, the law will imply the obligatio n and enforce it.' 17 Am. Jur. 2d Contracts § 255 (1964).
In the present case, this Court is presented w ith a sing le contract, the provis ions of which cannot be harmoniz ed. The amendment to the contr act neither refers to nor deletes the contract's liquidated damages clause, yet the ri ghts contain ed in the am endment necessarily negate the poss ibility of exercis ing the contr ac t' s liquid ated damages provisions. We canno t as cer tain the p art ies ' in tent ions from the w

ords of t he contrac t alone. Thus, we l ook

to the circumstances which existed at the time the agreements were5

exe cuted in order to deter mine the parties ' intentions. Hamblen County , 656 S.W.2d at 334.

When the parties ex ecuted the orig inal contrac t, Graves

pl aced $1 ,000 earnest moneyin escr ow. By doing so, he retained the right to buy 10.7 acres of prope rty for a period of nine months. Th e parties' original agreement was essentially an option contr

act. See generally Pinney v . Tarpley , 686 S.W.2d 574, 580 (Tenn. App. 1984). A s is typ ical of real estate option c ontracts, Gr aves agreed to forfeit the escr owmo ney, as li quidated damages to the seller

s (Appellees ), in the event that he failed to purchas e the property at the expirat ion of the option ter m.

When the amendment to the ori ginal contr act was executed in March of 1992, the nature of the contract c hanged. The amendment required Gr aves to place $20,000 from the sale of the one acre parcel into esc row. It further prov ided that the $20,000 sum "shall" be applied to Gr

aves' acc ount at closin g of the balance of the property. The amendment states that closing of the one acre parcel "s hall" serv e as Graves ' notice to c lose the balance of the property. Finally , Grav es' actions were consisten t with a complete unde rstanding of t he am end men t's te rms. If, a fte r ame ndin g the c ontr act, Grave s ha d failed to close on ei ther the sing le acre or t he balance of the p roperty, th e Appellees' remedywould have been limited to $1,000 in liq uidated damages. Howev er, havin g exercis ed his option tosell the one ac re parcel, we find that Graves w as bound to clos e on the balance of the pr

operty.

The chancellor awarded Appel lees the r emedy of specific performanc e. Graves argues that t he Appellees failed to prove t hat they suffered damag es and are thus n ot entitled to specific performa nce. Specific perform ance is an equitable remedy. GRW Enters., Inc. v. Davis , 797 S.W.2d 606, 614 (Tenn. App. 1990) (ci ting T.J. Moss T ie Co. v. Hill , 191 Tenn. 582, 586, 235 S. W.2d 587, 588 (1951)) . It is available to either the buyer or the se ller , subj ect to the tr ial c ourt' s disc retio n, w here an awar d of dama g es cannot make the aggr ieved party whole. Shuptrine v . Quinn , 597 S.W.2d 728, 730 (Tenn. 1979). An award of spec ific performance i s particul arly appr opriate w hen dealing with cont racts for th e sale of real pr

operty, bec ause of the unique n ature of land. GRW Enters. , 79 76

S.W.2d at 614. In Lane v. Associated Housing Developers , 767 S.W.2d 640, 642 (Tenn. App. 19 88) the court, quo ting Gibson's Suits in Chancery , stated: If a contract has

all the essen tials of val idity . . . and i f compensation in damages for its breac h is impract icable, or w ould be inadequate, a complaint will be maintained for

specific perfor mance. The broad ground of jurisdict ion in such cases is t h e inadequacy , or impracti cability , of damages to do complete justice tothe injured pa rty. If the contract r

elates to real estate and is in writing, and the foregoing requirements are satisf ied, specific performance will be decreed, for damag es cannotadequately represent real property.
An award of damag es is neither adequate nor pr

actical in th e pr esent case. The Appellees contracted to sell the entire 10.7 ac re parcel to Graves for $85,000. Graves sold
one acre, compri sing the cor ner lot of the parcel, for $60,000. Not o nly is the tract no longer intact, the most valuable portion of the 10.7 acre parcel is owned by a third part y. We agree w ith the trial court's determi nation thatspecific perfor mance was an ap propriate remedy under the facts of the case at bar.

Acco rdin gly, we affirm the chancellor' s ruling in all respects. Costs on appeal are taxed to the Ap pellant.

HIGHERS, J.

CONCUR:

CRAWFORD, P.J., W.S.

FARMER, J.