# FILED
June 12, 1998 Cecil W. Crowson Appellate Cou rt Clerk 

### IN THE COURT OF APPEALS OF TENN ESSEE

AT NASHVILLE

THOMAS A. (TOMMY) WORTHAM, ) ) Plaintiff/Appellant, ) ) Appeal No. ) 01-A-01-9709-CV-00464 VS. ) ) Dickson Circuit ) No. CV762 WEST MEADE CORPORATION, ) JOY MARSH , PRESIDENT , ) ) Defendant/Appellee. )
APPEALED FROM THE CIRC UIT COURT OF DICKSON COUNTY AT CHARLOTTE, TENNESSEE THE HONORABLE ROBERT BURC H, JUDGE

NEAL LOVLACE HARVILL & LOVLACE 102 Bank Avenue Centerville, Tennessee 37033 Attorney for Plaintiff/Appellant HENRY F. TODD, JR. TODD, SPENCER & ATKINS 404 East College Street Dickson, Tennessee 37055 Attorney for Defendant/Appellee

AFFIRMED AND REMAN DED

BEN H. CANTRELL, JUDGE
CONCUR: KOCH, J. WELLES, S.J. 

## O P I N I O N- 2 - The plaintiff filed suit for specific perfo rmance on an option to purchase real property. The

trial court found that the plaintiff had failed to exercis e the option before it exp ir ed, and granted summary judgment to the defend ant property-owner. We affirm the trial court.

I.

T he facts of this case are undisputed, and relatively si mpl e. I n September

of 1993, Mark Cook and Kenneth Godw in signed a contract to l ease the Tice Springs Market in Dickson, Tennessee from W est Me ade Corpo ration. The duration of the lease was to be three y ears, from September 1, 1993 until August 31, 1996. On e clause in the contract set out the terms of an option to purchase the property: OP TI ON TO PURCHASE. It is hereby granted to L essee an option to purchase said pr operty at an y tim e during the term of this agreement or renewa l therof. Such option sh all be secured by the payment of Fi ve Thousand and No/100 ($5, 000.00) Dollars, cash in hand pai d, the receiptof which is hereby acknowledged. In th e even t that this option is exercised , said Five Thousand and No/100 ($5,000.00) Dollars shall be appli ed to t he purchase price. The purchase price for said r eal prope rty und er this option shall be Sixty Thousand and No/100 ($60,000) Dollars. The Lessee upon exercising thi s option shal l be g iven credit for the principal amount of payments amortized on a b alance of Fifty Five Thousand and No/100 ($55,000) Dollars for a period of ten (10) years a t 10.5% interest. Said payment s shall be deducted f ro m the purchase price. If the option is not exercised, any

and all monthly payments and the original option payment of Five Thousand and No/100 ($ 5, 000) Dollars shall now and forever be considered as rent for the period of occupancy of

the Lessee and possession of the real property.

Anot herclause in the lease gave the l essee the right to renew the contract for an additional three year s at the end of the initial lease period , subject to renegotiation of the rental rate, said new rental rate not to exceed the current levelby
more than 10%. Still another cl ause provided that if at the end of the three-year term the lessee remained in possessi on of th e premises without renew al, he would then- 3 -

become a tenant at will on a month- to-month basis, and there could be no “renewal, dislease, or exercise of any option by operation of law.”

On February 1, 1994, th e lessee s assig ned the l ease to the plaintiff, Tommy Wortham, “in cons id eration of Ten Dollars ($10.00) and other good and valuable considerations .” Mr. Wortham presumably operated the market for the remainder

of the lease period. On August 14th or 15, 1996, Eric Baxter, an employ ee of West Meade Corporation met with Mr.Wortham, and gave him an amortization schedule, which indicated that if Mr. Wortham wished to purchase the property, the pay-off amount was $41,580.33. Inhis affidavit, Mr. Bax ter stated that

he advised Mr. Wortham at that time that if he wanted to purchase the property,but wasnot yet ready to do so, he could preserv e his rights by r

enewing the lease.

On August 22, 1 996 , Mr. Wortham’s attorney sent a letter to W est Meade which stated, “[p]lease be advi sed that Mr. Wortham intends to exercise the option to purchase. He will make ever y effort to finish his financing arrangements

so that the purchase can be completed w ithin the next thirty

(30) days.”

The attorney for West Meade responded with a le tter thatwas sent on Aug u st 28, 1996: “Please remember that the lease expires on September 1, 1996. W it hout waiving any rights or altering the lease, my client has advised me that your clientmay purchase the property for the pay-off amount as lo ng as it is closed by September 15, 1996.”

Mr. Wortham’s attorney replied with a letter dated September 16, 1996, which reads in perti nent part:

“My client has been working on financ ing and he anticipates that we will be able t

o tender the purchase price befor e the end of the month. I would point out that I could not tell from the lease and option to purcha s e that the September 15th deadline you mentioned in y our letter was call ed for by the termsof the lease. In fact, the lease provides tha t should the- 4 - Lessee hold over then it becomes a month to month lease. I have advised my cl ient that he now has a mon th to mont h lease and, in fact, he has tendered the lea se payment of $800.00 as he has done in many months past.”

On September 30, 1996, Mr. Wortham ten dered the purchase price. West Meade did not accept it. M r. Wortham then filed suit to enforce the option. Both parties file d mo tions for summary judgment, e ach one declaring that ther e were no disputes of material fact. The trial court fou nd the case to be a close one, but upon examination of the facts and the applicable case law , he granted summary judg ment to the defendant. This appeal followed.

II.

The cardinal rule for

interpreting contract

s (including option contracts) is to ascer

tain the intenti on of the parties , and to give effect to that int ention, consistent

with legal principles. Bob Pearsall Motors v. Regal Chrysler-Ply mouth, 521 S.W.2d 578 (Tenn. 1975). To lea r n the parties’ intention, the words within the contract must be given their usual, natural and or dinary meaning, unless both parties agree at the time of contract tha t their mean ing is otherwise. Moore v. Moore , 603 S.W.2d 736 (Ten n. App. 1980); American National Pr operty and Casualty v. Gra y , 803 S.W.2d 693 (Tenn. App.1990).

The contract at issue gave the plaintiff the right “to purchase said property at any time during the t e rm of this agreement or renew al thereof,” but the right expired when he became a tenant at will. Although Mr. Wortham asserts that he exercis ed the option by sending his letter of August 22, 1996, w e do not deem that letter to be the equivalent of a “purchase,” as that word is or di na ri ly un de rs to od . We would not go so far as to construe the terms of the contract as absolu telyrequiringthe parties to close before September 1, 1996, but we believe a mor e definitive act was- 5 -

required on the part of Mr. Wortham to “purchase” the property within the applicable period.

The general law of options i s not so rigorous as to r equire a party to close on the property within the option periodin order to exercise hi s rights (unless the contract so specifies), but it does r equire him to bind himself by an unqualified acceptance before he will be deemed to have validly elected to make the purchase: “An option cannot be enforced as a contrac t until e x ercised by acceptance. The acceptance mus t be unqu ali fied, absolute, positive, w ithout reservation, and according to the terms of the option. An accept ance of an option must be such a compliance with the conditions as to bind both parti es, and if it fa ils to do s o, it binds neither.” Pinney v. Tarpley

, 686 S.W.2d 574, 580 (Tenn.App. 1984)

It does not appe ar to us that the plaintiff’s le tter of Augu st 22 met t his standard. We are doubtful that the mere announcement of an intention to exercise an option, coupled with a promise t o attemp t to secur e the fin ancing in t hirty days is
so definit e an acce ptance a s to bind t he optio nee if he we re t o change his mind or unable to secure financing.

At trial and on appeal, the parties relied upon tw o different cases to bolster their resp ective positions: Adams v. Swift , 500 S.W.2d 437 (Tenn. App. 1973)
an d Dave Williams Printi ng Co. v. Wooten, 644 S.W.2d 403 (Tenn. App. 19 82). I n both of those cases, as in the present case, an optionee announced an intention to exercise his option shor tl y before the option contract ex pired, but was not prepar ed to close within the option period; the owner in each case refused to sell the p roperty, and the optionee brought suit for s pecific performance. In the Adamscase, this court affirmed the trial court’s denial o f specific performance, whil e in the Dave Wil liams case, we aff irmed the trial court’s order that the plaintiff be granted specific performance.- 6 - The contract in the Dave Wil liams case required that the

terms of closing be those provided in a Mid-South Title Company sales contr act. The sales contract in question allowed fifteen day s from the examination of title before the parties settled bythe reciprocal performances of making a cash payment for any balance owing, and presenting a warranty d eed. The proof sh owed that three days before the end ofthe option period, the lessee hand-delivered to the defendant a notice that shewished to purchase the property under the option clause. Accompanying the notice was a MidSouth Title Company sales contract for the seller’s signature, and a $1,000 check as earnest money.

The court held that this was sufficient to bind the parties, and noted in particular the importance of the clause relating to the Mid-South T itle sales contract in its decision. We be lieve that the tender of the sales contr act served three important functions: it signalled to the seller the intention of the buyer to strictly comply with the termsof the option, it extended the per missible date of

closing by a specific number of days, and it provided for “an orderly exchan ge of payment and title to the pr operty in order to consummate a purchase .” 644 S.W.2d at 407.

The Dave Will

iams court specifically di stinguished that case from Adam s in that there was nosuch sales contract clau se involved in the Adamscase. The
same distincti o n applies to the present case. Like the contract in the pr esent case, the Adamscontract was quite specific as to the time in w hich the option ha d to be exercised, but far

less specific as to the manner in which it was

to be exercised. The relevant language of

the option contract in the Adamscase simplyread “[s]aid option to purchase may be exerci sed by said second party at any time prior to

January 20, 1970, or by his assigns , upon ter ms as follows: the purchase or option price is $15,100.00 payable, as follow s: . . . .”- 7 - On January 15, 1970, Mr. Adams notified the Swifts by letter of his intention to exercise the option. As in the present case, there w as no tender

of money
or of a contract. On January 28, 1979, the plaintiff sent the defendants another letter, stating “[w]e have made arrangements for closing on the sale of your property, . . . on Monday, February 2, 1970 at 2:30 P.M .” Counsel for the defendants repl ied with a letter “to advise you that the said option ag reement wasnot properly exercised within the permiss ible per

iod in a ccordan ce wit h the ter

ms thereof, and therefore, pursuant to the applicable Tennessee law, the said option agreemen t has terminated.”

The Adamscourt noted that the contract did not prov ide for the exercise of the option by the mere giving of notice, and construed it as requiring that the sale close within the option peri od. As the contract in the pr esent case likewise does no t provide for exercise of the option by the giving

of notice alone, we must concl ude that Mr. Wortham’s le tter of August 22, 1996 was no t sufficient to exercise the option within the applicable period, and that the option expired by

its own terms before it w as exercised.

III.

The judgment of the trial court is affirmed. Reman d this caus e to the Circuit Court of Dick

son County

for further proceedings consi stent with this opinion. Tax the costs on appeal to the appe llant.

____________________________ BEN H. CANTRELL, JUDGE
CONCUR:- 8 -

_______________________________ WILLIAM C. KOCH, JR., JUDGE

_______________________________ DAVID H. WELLES, SPECIAL JUDGE