### IN THE COURT OF APP EALS OF TENNESS EE AT NAS HVILLE Fe bruary19, 200 4 S es sio n
J. H OW ARD JOH NSON, ET AL 

### . v. MI CHAEL R. ALLI SON, ET AL 

### .

Appeal f romthe Chancer y Court for Davidson Cou nty No. 02-3101-II Car ol McCoy, C hancellor

No. M2003- 00428-COA-R 3-CV - F iled October 7, 2004

The pa rties enter ed into an option contra ct for the s al e an d p urcha se of a piece of land. The barg ained- for op t i o n h ad a limited duration, with the buy er e ntitled to ex tend the option for
a dd iti on a l c on sid e ratio n if it e xer c ise d th a t rig ht w ith in an a g re e d- up on tim e fr a me

. Th e bu y e r p a id for se vera l ext ensions, but did not ex erc ise the opt ion befor e the f inal option deadline had pa ssed. Th e se lle rs su bs e qu e ntl y re fu se d to se ll, a nd the bu y e r su e d fo r br e a c h of con tr act and sp e c if

ic p e r f o r man c e

. T h e s e ll e r s f

il e d a mo ti o n f

o r s u mm ar y ju d g me n t, w h ic h th e tria l c o u r t g r a n te d

. We
a ff ir m th e tr ia l c ou rt

. Tenn. R. App . P . 3 Appeal as of Right; Judgme nt of th e Chancer y Court Aff irm ed

P ATR I C I A J. C O T T RE LL , J ., delivere d the opinion of the court, in which W I L L I AM B. C A IN and F R ANK G. C L EME NT , J R ., J J ., joined.

Jo s e p h L

. L a c k e y , Jr

. , N a s h v il le , T e n n e s s e e , f o r th e ap p e ll a nts, J

. How ar d Jo h n s o n , G e o r g e W. Ho lde r, Jr., ind ivi du a lly a nd /or As Attorne y -In- F a c t for Wes le y Ho lde r, I I I , an d Robe rt F . L a nc e , a ll d/b /a Gate way De ve lop me nt.

Kenne th L . Campbell, Nashville, Tenne ssee, f or the a ppellees, Micha el R

. Al l i s o n and Diane A. Allison.

OP IN ION

I

. A N O P T I ON T O P U R C HA SE The dispu t ed prope rty

is a 265 ac re tra ct of land in southweste rn Da vidson County . The
owner s and defe ndants, Michae l A llison and Diane Allison, ha d been using a portion of the tra ct for their sod produc tion business. Two hundred acr es of the pr operty was zoned AR-2 (a g ricultural use ), and the r emainder

was zoned CS (commerc ial/light industrial). At s o m e point, the Allisons (“Seller s”) de cided to sell their land.-2-

Th e th ree i nd iv id ual pl ain ti ffs , J . Ho ward J oh ns on , Ge orge W . Ho ld er J r., and R ob ertF. L ance decide d to buy

the Allisons’ la nd and to c reate a residential development on it. The y formed a limited liabilit y

company , Gatew ay

LL C, (“B uy er” ) to ac complish their purpose. The y understood that in order f

or their plans to succ eed, the y would have to g et the zoning of the land chang ed.

On F e br ua ry 20 , 2 00 1, the B uy e r andthe Se lle rs e nte re d into a n “ Ag re e me nt f or Pur c ha se of Re a l Pr op e rty ,” (“ I nit ia l Con tr a c t” ) wh e re by the B uy e r o btaine d a n o pti onof lim ite d d ur a tio n to purcha se the prope rty

for $2,600,000. Thecontra ct also g ranted t h e B uy er the rig ht to pursue re

zoning of the pr operty

while the option was in effec t and obli g ated the Seller s to cooperate in such
re- zoning.

The B uy er paid $3,000 to make the option ava i lable until March 14, 2001. T he initial payment, and any

subsequent payments, were to be put into an escr ow ac count and c redited to the purcha se price i f t h e s al e cl o s ed. The Buy er w as permitted to ex tend the option deadline f or one mon th at a

tim e , b y pay ing $5 ,0 00 fo r e a c h s uc h e xten sio n, bu t on ly fo r a lim ite d n umb e r o f m on ths

. One se ction of the contract state d, “Time is of the e ssence of this ag ree ment.” Oc tober 14, 2001 wa s de sig nate d inthe c on tr a c t a s the “ F ina l Op tio n De a dli ne .” An a dd iti on a l pr ov isi on fo r e xten sio ns to thi s d e a dli ne wa s in c lud e d inSe c tio n 2 (a ) o f the I nit ia l Co ntr a c t: Notwithstanding the fore g oing, if the Buy er has diligently pursued a pproval by

the Me tr op oli ta n Pl a nn ing Com mis sio n o f a f ina l su bd ivi sio n p la t f

or theapp ro xima te ly 200 Acr e portion of the property prese ntly zoned AR-2 (her einaf ter re fer red to a s the “Plat Approva l”) and if the B uy er ha s not rece ived the Plat Approva l by October 14, 2001, then the B uy er may

elec t to further extend the Option Deadline until Novembe r 14, 200 1 ; s im il ar ly , th e B u y e r may e le c t t o f u r th e r e xte n d th e O p ti o n D e a d li n e f or two more monthly

periods, if the Pl at Ap p ro v al i s not rece ived prior to the Option Dea dline as pre viouslyextended. Eac h of the for eg oing three extensions for the Plat Approva l will be elected b y d ep o siting with the Escr ow Ag ent, on or be fore the Op t i on Dea dline then in eff ect, a dditional Option Money of $5,000 for

eac h such extension . . .

The p ra ct i ca l result of this provision was to make January 14, 2002 the new de fac to final option deadline. The contra ct furthe r provided that the Option was to be e x erci sed by the B uy er g iving the Seller s notice of its int ent to purcha se and de positing with the esc row a g ent an a dditional option pay ment of $50,000.
The proc ess of chang ing the zoning prove d to be more time-c onsuming a nd complicated tha n the B uy er ha d anticipated. A s a re sult, the B uy er asked the Sellers for an additional extension t o the option period. On De cembe r 21, 2001, the pa rties entered in t o a “First Amendment to the Ag re e me nt for Pur c ha se of Re a l Pr op e rty .” (“ Am e nd e d Co ntr a c t” ). Th is a g re e me nt s pe c if ic a lly allowed f or nine (instea d of three ) monthly extensions to the orig inal Option Deadline of October 14, 2001, but with the price of eac h monthlyextension afte r t he thi rd extension set at $10,000 instead of $5,000.T he appel l ant s ’ bri ef er r oneous l y s t at es t hat t he $5 0, 00 0 was not t o be app l i ed t o t he pur cha s e pr i ce. 1
-3- Further, the option money from the additional six extensions was to be paid direc tly to the Sellers instead of being place d in escrow , and would not be c redited a g ainst the purcha se price . An additional provision was that if the B uy er did not exercise the opt ion by J anuary 3, 2002, $53,000
wo uld b e w i t h d r a w n f

r o m t h e e s c r o w a c c o u n t , a n d p a i d d i r e c t l y t o t h e A l l i s o n s

. O f t ha t su m, $50,000 was to be c redited a g ainst the purcha se price

. 1

De s p i t e th e de ad l i n e ex t en s i o n s , Ge o rge Ho l d er re m ai n ed co n ce rn ed t h att h e z o n i n g ch an ge would still not be completed be fore the option expi red. He spoke about those c oncerns sever al times wi th D a vidWils on , D ir e c tor of Pr op e rt ie s f

or the Al lis on s’ re a l e state a g e nt.

On Fe bruary

26, 2002, Mr. Wils on sent Mr. Holder a letter stating that he and Mike A llison had met with the Metro Councilman in whose district the subject pr operty was located. The le tter disclosed that the counc ilman’s schedule left insufficie nt ti me for the zoning proce ss to be completed prior to the e xpir a tio n o f the op tio n c on tr a c t.

The le t t er also stated that Mr. Allison would consider a further e x tension of the contr act under two c ondi t i o n s : (1) the submission of a spec ific plan (PUD or UDO) to the planning
c omm iss io n, to Ca rt er & As so c ia te s, a ndto the c ou nc ilm a n p ri or to M a y 1, 20 02 , f

or the ir comments, and (2) documentation showing evidenc e of suf ficient funds to c lose the trans a ction upon t h e z o n i n g b i l l p as s i n g s ec o n d re ad i n g.
Th e B uy e r r e lie s hea vil y on a se c on d lette r f ro m D a vidWils on to G e or g e Ho lde r, date d A pril 23, 2002. I t beg ins, “[d] uring our re cent discussions, y ou reque sted clarification reg arding the term leng th for a c ontrac t ext ension bey ond J uly 14, 2002.” It then summarizes the earlier letter, note s that the re vised deve lopment plan has bee n submitt ed to the planning commission, and states that “[t] he
re qu e ste d f

inanci al in for ma tio n may be pr ov ide d a nytim e prior to M a y 3, 20 02 .” Th e le tte r a lso states that “we fee l it would be in every one’s be st interest to provide y ou with an extra month or two bey ond J uly to f

inalize a nd close the transac tion,” and “[i] n the event that rezoning is postponed or delay ed bey ond J uly , Mike may consider an additional contra ct extension.”

Be low the closing and Mr. Wil son’s signature, the following sentenc e appear s in italic type:
This l etter is for informati on and discussion purposes only and is not intended to be an offer to extend the contract. Any e xtension must be agre ed u p on in writ ing by bo th t he Bu y e r a nd Se lle rs.
The B uy er did not furnish the S ellers with the financial information by May 3, as re quested in M r. Wils on ’s le tte r. Th e zon ing c ha ng e pa sse d its se c on d re a din g on July 16

. Ea rl ie r that same day , howeve r, plaintiff How ard J ohnson had gone on the prope rty to ge t some information for the councilman. While he wa s on the propert y , Mike Allison asked Mr. Johnson, “y ou rea liz e y ou no longe r have a contr act? ”A n A g re e d O rd e r fil e d o n J a n u a r y 6 , 2 0 0 3 re p la c e d G a te w a y D e v e lo p m e n t, In c . as the so le na m e d p la intiff 2 wi t h J. H o ward Jo hnson, G eo rge W

. H o l d er Jr. , i nd i vi d ual l y and / o r as at t o rney

- i n- f act fo r W esl ey H o l d er I II , and R o b ert F. Lan ce, d/ b/ a G at eway D eve l op ment , I nc.
-4- The B uy er had tender ed a $10,000 chec k to the defendants on J uly 12 with the intention of extending the option period to August 14. The Sellers acc epted the chec k at that time, but did not cash it. B y

the wee k of Jul y

23, the B uy er had finally g otten all the nec essary financ ing a

rra ng ed and met with David Wils on to advise him of t hat fact. Mr. W ilson ref used t o g ive them a c ontrac t, and he subseque ntly

returne d the che ck of J u l y 1 2

. On Aug ust 14, Georg e Holder offe red another $10,000 chec k for the A ugu s t ex t en s ion, but Mr. Wi lson told hi m it would not be acce pted. The rezoning passed its third rea ding on A ug ust 20, and was sig ned by the May or on Aug ust 21.

II. C OU R T P ROCE E DI NGS

Gate way De ve lop me nt f

ile d a Complaint

fo r b re a c h o f c on tr a c t in the David son Co un ty Chance ry Court on October

17, 2002. The Complaint rec ited that the Buy er had spent in excess of

2 $2 34 ,0 00 fo r o pti on pay me nts , e ng ine e ri ng a ndoth e r e xpe ns e s in a n e ff ort to g e t th e pr op e rty rezoned, that the zoning chang e inure d to the benef it of the Sellers, and asserted that the B uy er w as entitled to specific pe rformance of the option contra ct.

The B uy er a dvance d two theories to support the c laim: first, that the option period did not end until some time in August of 2002; second, that even if the opt ion expired on J uly 15, 2002, the defe ndants should be estopped from so asserting beca use they had impliedlypromised the plaintiffs an extension of the option de adline until the property was re zoned. The Sellers re sponded with an Answer and a Counter -Complaint, a sking for a Dec laratory J udg ment that the option ag ree ment was
un e nf or c e able or

ha d e xpir e d. Th e y

su bs e qu e ntl y

fi le d a Mo tio n f or Sum mary

Judg me nt.

A f t e r a h e ar i n g o n t h e M o t i o n , t h e tr i a l c o u r t g r a n t e d s u m m ar y j u d g m e n t t o t h e S e l l e r s

. In its jud g me nt of Janu ary 14 , 20 03 , the c ou rt sp e c if ic a lly he ld that th e fi na l op tio n d e a dli ne wa s July 15, 2002, and that the plaintiffs did not exercise the option in the manner r equire d by the contra ct by g iving notice to the defendants and depositing $50,000 with the escrow age nts befor e that date. This appea l followed.

III
. S UM M ARY J UDGMENT AND C ON TRA C T P R I N C I PL ES Summary judgme nt is only appropriate where there are no g enuine issues of m aterial fac t and the moving pa

rty is entitled to judgment as a matter of la w. McCarl ey v. W es t Qu a lity Food Se rv ic e s, 96 0 S. W.2 d 5 85 , 5 88 (T e nn . 1 99 8) ; By rd v . H all , 847 S.W .2d 208, 211 (Tenn.1993) ; Tenn. R. Civ. P . 56.04.

I n th is c a se , th e re is n o d isp ute a s to the op e rativ e fa c ts: that is, as to the se qu e nc e of e ve nts that occur red during the ong oing de aling s betwee n the parties. I nsofar as there is a dispute as to the date on whic h the option e x pired, that is a matter of contra ct interpre tation, and there fore a questionT he B uy er ar gu ed i n s epar at e document s t hat t he ef fect i ve dat e wa s D ec emb er 26 and al s o t hat i t was 3 D ece mb er 31. T he i ncons i s t enc y appare nt l y ar ose f r om conf us i on about t he ef

fect t hey wi s hed t o at t r i but e t o t he f i ve- day inte rv a l afte r sig n ing w h e n the fi rs t o p tio n p a ym e n t b e c a m e d u e

. -5- of law r at h er t h an a materia l question of fac t such as would pre clude summary judgme nt. See Planters Gin Co. v

. Fede ral Compre ss & W arehouse Co., Inc. , 78 S.W .3d 885, 890 (Tenn. 2002) ; Doe v . HCA Health Serv ices o f T en n
. , Inc. , 46 S.W .3d 191, 196 (Tenn. 2001) . Our re view of the tr ia l c ou rt ’s le g a l c on c lus ion s is de no vo , w ithno pres um pt ionof c or re c tne ss a c c or de d to its judgme nt. Ba in v . W

e lls , 936 S.W .2d 618, 622 (Tenn.1997)

.
I t is well-e stablished that “[t] he car dinal rule for interpre tation of contra cts is to ascertain the intention of the parties and to give eff ect to that intention, consistent with leg al principles.” Pe ar sa ll Motors Inc. v . Regal Chrysler-Ply mouth, Inc. , 52 1 S.W. 2d 57 8, 58 0 ( Te nn . 1 97 5) ; se e als o Pl an te rs Gin Co. , 7 8 S. W.3 d at 88 9- 89 0; Galleria Associates, L.P. v. Mogk , 34 S.W .3d 874, 876-77 (Te nn. Ct. App. 2000).

The intention o f t he parties is derived fr om the lang uag e of the contra ct itself. When i n t erp re t i n g co n t r a c t s , t h e c o u rt s s h o u l d gi v e e ac h t er mi t s u s u al , n at u ra l an d o rd i n ar y m ea n i n g. Planters Gin Co. , 78 S.W .3d at 889-890 ; E v c o Co rp . v . R os s , 528 S.W

. 2 d 2 0 , 2 3 (Tenn.1975) ; Realty Shop, Inc . v. RR W estminster Holding, Inc. , 7 S.W .3d 581, 597 (Tenn. Ct. App. 1999).

Th e c ou rt s sh ou ld a vo id str a ine d c on str uc tio ns wh ic h c re a te a mbi g uit ie s wh e re no ne a c tua lly exis t. Planters Gin Co. , 7 8 S. W.3 d at 89 1; Hillsboro Plaza Enterprises v. Moon , 860 S.W .2d 45, 47-48 (Tenn. Ct. App. 1993). I f the c ontrac t is unambiguous, then the c ourt may not look bey ond its four corne rs to asce rtain the pa rties’ intentions. Rogers v. First T ennesse e Bank

NationalAss’n , 73 8 S. W.2 d 6 35 , 6 37 (T e nn . Ct . A pp . 1 98 7) ; Bokor v. H older , 722 S.W .2d 676, 679 (Tenn. Ct. App. 1986).

IV. I S S UE S ON A P P E AL
A. T HE F I N A L O P T I ON D A TE
The B uy er note that bot h the orig inal contra ct and the amended a g ree ment contain clauses stating that the “ef

fec tive date” of ea ch ag ree ment would be “the date the la st of Buy er and Sellers have e xe c u te d th is a g r e e me n t. ” Si n c e th e A me n d e d A g r e e me n t w a s s ig n e d b y th e Se ll e rs and delivere d to the Buy er on D ece mber 26, 2001, the B uy er c ontends t h at t he fina l option deadline sh ou ld b e e ig ht m on ths la te r, or Au g us t 26 , 2 00 2. I n th e a lte rn a tiv e , the y arg ue that at th e ve ry le a st, 3 the contra ct contains a n ambig uity as to the final date the option could be e x erc ised.
The lang uag e of both contrac ts makes clea r, howe ver, that there is no conne ction betwee n the ef fec tive date of

the contra ct and the f

i n al o p t i on deadline. T he ef fec tive date of

the I nitial Con tr a c t f un c tio ns a s the sta

rt ing po int

to d e te rm ine the datefo r the B uy e r’ s o bli g a tio n to de po sit the op tio n mo ne y wi th the Es c ro w Ag e nt (“ wi thi n 5 bu sin e ss da y s fr om the e ff e c tiv e date of

thi s-6-

Ag ree ment”), and to conduct a survey of the prope rty

(“w ithin 90 day s from the Ef fec tive Date” ). Under the Amende d Contract, the B uy er’ s obligation to deposit t he option money with the Escrow Ag ent is also stated to be within 5 business day s from its effe ctive date

. Th e c on tr a c t la ng ua g e re fe rring to the fi na l op tio n d ate is c omp le x, bu t it is no t a mbi g uo us

. A f ina l op tio n d a te of

Oc tob e r 1 4, 20 01 is sp ecif ie d inthe I nit ia l Co ntr a c t, w iththr e e po ssi ble
ex t en s i o n s fr o m that date mea sured in one month interva ls. The Amende d section 2(a ) of the Con tr a c t in c re a se s th e nu mbe r o f p os sib le e xten sio ns a s f oll ow s:

Howeve r, the B uy er ca n ex tend the Option Dea dline for one month by depositing dire ctly

with the Escrow Ag ent, on or befor e Marc h 14, 2001, additional Option Money

of $5,000.00. I f the B uy er elects the f oreg oing f

irst ext ension of the Option Dea dline, then t he Buy er may elec t to further extend the Option Deadline f or six succes s i v e monthlyperiods by depositing w ith the Escrow A g ent, on or be fore the Option Dea dline then in eff ect, a dditional Option Money of $5,000.00 for

eac h such extension, so that if all of the e x tensions are elec ted, the fina l Option Deadline is O c tob e r 1 4, 20 01 . N otw ith stand ing the for egoing , if the B uy e r h a s d ili g e ntl y pursued approva l by the Metropolitan Planning Commi ssion of the final subdivision plat for the a

pproxi mat el y 200 acr e portion pre sently zoned AR-2 (her einaf

ter ref err ed to as the Plat Approva l) and if the B uy er has not rec eived the Plat Appr oval by October 14, 2001, then the B uy er may elec t to further e x tend the Option Dea dline until November 14, 2001: simil arly , the Buy er may elec t to further e x tend the Option Dea dline for e igh t more mont hly periods, if the Pl at Approva l is not receive d prior t o t h e O p t i o n De ad l i n e a s p re v i o u s l y ex t en d ed

. E ac h o f t h e f o re go i n g nine extensions for the Plat Approval will be ele cted by depositing w i t h the Escr ow Ag ent, on or be fore the Opti on Dea dline then i n eff ect, additional Option Money of $5,000.00 for e ach suc h extension.
Although it refer s in one sentenc e to “e ight more monthlyperiods,” and in another to “ the fo re g oin g nin e e xten sio ns ,” the re is no a mbi g uity , be c aus e the nin e e xten sio ns arec le arl y me a nt t o be mea sured f

rom the initial final opti o n d ea d l i n e of Oc tober 14, 2001, a nd the eig ht additional monthlyperiods ar e spec ified to extend from Novembe r 14, 2001, the date of the fi rs t option extension.
To sum up, the initial contract re ci ted a f inal option deadline of O ctober 14, 2001, but allowed f or three additional extensions to bring the ac tual deadline date to J anuary 14, 2002. The
a me nd me nt o f D e c e mbe r 26 , 20 01 a dd e d a no the r six e xten sio ns , in dic a tin g a ne w f ina l de a dli ne date of Jul y 14, 2002. Since that date fell on a Sunday , the clause of the contra ct re lating to c omputation of time adva nces t h e actua l deadline to the ne x t business day , J uly 15, 2002. The B uy er ha ve a tte mpt e d to fi nd a n amb ig uity by lin kin g un re la te d p ro vis ion s o f the c on tr a c t to g e the r, re su lti ng in what can only

be char acte rized as a straine d construction. The car efully worde d clause s which re fer to the op tio n d e a dli ne s a

re no t a t a ll a mbi g uo us

.-7-

Consequ e n tl y , th eB u y e r ’ s o p tion ex pired July15, 2002. No furthe r extension was neg otiated or ag ree d upon. Further, B uy er did not exercise the option prior to its ex piration.

B. “T I M E I S OF THE E S S E NCE ”

I n a n o rd ina

ry c on tr a c t to pu rc ha se re a l pr op e rty , th e ina bil ity of a pa rty to c los e on the date
re c ite d inthe c on tr a c t is no t c on sid e re d to be a ma te ri a l br e a c h of thec on tr a c t. T he g e ne ra l rule is that time is not of the essence in a re al estate sales contr act, unless the contrac t specifies othe rwise. Hillard v. Franklin, 41 S.W. 3d10 6, 11 3 ( Te nn . Ct . A pp . 2 00 0) ; Lewis v. Muchmore , 26 S.W .3d 632, 639 (Tenn. Ct. App. 2000).

The rule is the exact opposite for option contra cts. Unlike a c ontrac t of sale, an option
c on tr a c t i s a u n i l a t e r a l c o n tr a c t , “ w h i c h a c t s a s a c o n t i n u i n g o f f e r , g i v e n f

o r c o n s i d e r a t i o n , to purcha se or lea se p roperty at an a g ree d upon price and terms, withi n a specified time .” (e mph a sis added) . B LACK ’ S LAW D I CT I O N A RY (5th ed. 1979). T hus, “The r ule is uniform that both at law and in equity , time is of the essenc e of an option c ontrac t. The rule is nece ssary from the ve ry

nature of the contra ct itself.” Ray v . Thomas , 2 3 2 S

. W

. 2 d 3 2 , 3 4 (T en n

. 1 9 5 0 )( ci t i n g W I L L I S TON ON C ON TR AC TS § 853; 17 C.J .S. Con tra c ts § 504 at 1072) . S e e als o Allen v. National Advertising Co. , 798 S.W .2d 766, 768 (Tenn. Ct. App. 1990).

There was ther efor e no need for the parties to inc lude, as they did, the phrase “time is of the
essenc e” in their

contra ct, since the contra ct, by its nature, alr eady i n cl u d ed that provision. Obviously , harsh r esults may sometimes follow when a party is at risk fo r l osing a ll its rig hts by faili n g to a c t in a ti me ly f a s h io n

. T h is is e s p e c ia ll y li k e ly in c a s e s li k e th e p r e s e n t o n e , w h ere the optionee had difficulty establishing the financ ial and reg ulatory conditions ne cessa ry to e x erc ise the option.

I n this appeal, the Buy er has focuse d almost entirely on the problems it encounter ed in try ing to chang e the zoning w ithin the tim e permitted by the option, a

matter that ultimately

proved to be bey ond its control. We note, howeve r, that the c ontrac t did not make a chang e in zoning a c ondition fo r the B uy e r’ s e xer c ise of the op tio n. Th e B uy e r wa s p e rm itt e d to pu rs ue re -zo nin g of the pr op e rty under the contra ct (a nd was promised the Sellers’ cooper ation in that endea vor), but wa s not require d to do so.

Th e B u y e r

ar g u e s o t h e r w i s e , c o n t e n d i n g th a tt h e c o n tr a c ta l l o w e d t h e S e l l e r s t o d e c l i n e to close during the option period if the r e-zoning was n o t accomplished. But a f air re ading of the contra ct s hows this not t o be the c ase. While the B uy er’ s difficulties with zoning and f inancing wer e unfortunate , there was nothing in the contra ct itself that would have preve nt ed it from purcha sing the prope rty

at any time prior to the final option dea dline.A dd i t i onal l y , t he I ni t i al C ont r act i t s el f st at es t hat “[ n] o provi s i ons of t hi s Agr eement may be amended or added 4
to e x c e p t b y a g re e m e n t i n w riting sign e d b y the p a rtie s o r th e ir re sp e c tive su c c e sso rs in inte re st.”
-8- C. E STOP PE L

Th e Statut e of

F ra ud s r e qu ir e s a ny

c on tr a c t for th e sale o f r e a l pr op e rty to b e in w ri tin g in
or de r t o b e e nf

or c e able . T e nn . Code Ann . § 29 -2 -1 01 (4 ). Th is i nc lud e s c on tr a c ts w hic h g rant a p ar t y a n o p t i o n t o p u r c h a s e s u c h p r o p e r t y. An de rso n v
. Ha c k s Cro ssi ng Pa rtn e rs , 3 S.W .3d 482, 4 4 8 5 ( T e n n

. C t

. A p p

. 1 9 9 9 ); GRW En ter pr ise s, In c . v . D av is , 7 97 S.W. 2d60 6, 61 2 n .6 (T e nn . Ct

. App. 1990). It is undi sputed that the parties did not enter into a written ag ree ment to ext end the option bey ond the date se t out in the Amended Contrac t.

The B uy er se eks to avoid the ope ration of the Statute of Fr auds by relying on the defe nse of equitable e stoppel. I t ar gu es t h at the Sellers should not be a llowed to rely on the J uly

15, 2002 deadline f or exercising the option, because of assuranc es m ade by the S ellers’ ag ent which led the Buy er to be lieve that the deadline had been or would be extended. The elements that must be prove n to establish equitable estoppe l as a de fense to the exercise of a leg al rig ht are well established.

Th e do c tr ine of

e qu ita ble e sto pp e l r e qu ir e s evi de nc e of the fo llo wi ng e le me nts wi th respe ct to the party

ag ainst whom estoppel is asserte d:
(1) Conduct whic h amounts to a false re p resentation or conc ealment of materia l fac ts, or, at least, which is calc ulated to convey the impression that the fa c ts a

re oth e rw ise than, a ndinc on sis te nt w ith , th os e wh ic h the pa rty subsequently

attemp t s to assert; (2) Intention, or at lea st ex pectation that such conduc t shall be acte d upon by the other pa

rty ; (3) Knowle dg e, ac tual
or c on str uc tiv e of the re a l f a c ts. Eq uit able e sto pp e l a lso re qu ir e s th e fo llo wi ng e le me nts wi th r e sp e c t to the pa rty a sse rt ing e sto pp e l:
(1) L ack of knowledg e and of t he means of knowledg e of the truth as to the fac ts in question; (2) Reliance upon the conduct of the party estopped; and (3) Ac tion based there on of such a char acte r as to chang e his pos i tion p r e j u d i c i a l l y.
Os bo rn e v . Mou nta in Life In s. Co , 130 S.W .3d 769, 774 (Tenn. 2004) (citations omitted). Se e als o Ro ac h v . R e nfr

o , 989 S.W .2d 335, 339 (Tenn. Ct. App. 1998)

I t is the bu rd e n o f the pa rty se e ing to i nv ok e e sto ppel to pr ov e e a c h a nde ve ry on e of its elements. Bokor , 7 22 S.W. 2da t 68 0; Th ir d Na ti o n a l B a n k

v
. Ca p ito l R e c o r

d s , I n c ., 445 S.W .2d 471, 476 (Tenn. Ct. App. 1969). We note that in this case, the B uy er doe s not alleg e conc ealment or fa lse repr esent ati ons of material fac ts. The B uy er ha d the same a cce ss to the fac ts as did the-9-

Sellers, and doe s not assert that the Sellers misled it as t o the prospects for tim ely completion of the rezoning proce ss. The B uy er c omplains, rather , that the Sellers’ ag ent m ade repre sentations that led it to believe that the fina l option deadline would either be extended or w aived.

Whil e it a

pp e ars that th e B uy e r m a y ind e e d h a ve re lie d to its de tr ime nt u po n c e rt a in state me nts ma de by

Mr . Wil so n, it d id s o de sp ite oth e r s ta te me nts ma de simult a ne ou sly by the a g e nt, wh ic h at th e ve ry

le a st s ho uldha ve ma de it a wa reof the ne c e ssi ty

fo r c auti on . T he e vid e nc e a lso shows that the B uy er kne w t hat M r. W ilson did not have the authority to bind the Sellers, and that the Sellers would not nec essarily ag ree to another e x tension of the option.

The B uy er c ites as the basis for his arg ument an ora l statement by M r. W i lson, and the ag ent’s letter of April 23, 2002. The Buy er claims that in an April 2002 mee ting, Mr. H older a nd M r. J o h n s o n as k ed M r. W i l s o n fo r a n ex t en s i o n j u s ti n ca s e t h e m at t erd i dn o tgo t h ro u gh p l an n i n g, zon ing a ndplat app ro va l w ith in the c on tr a c t ti me . M r. W il so n a lle g e dly sa id, “ I wi ll n ot a g re e to that, b u t y o u d o n o t have to wor ry about this as long a s the zoning is proce eding . You’redealing with honorable and ethical pe ople and we will do what is right.”
Reg ardle ss of the acc urac y of the above char acte rization, it was not re asonable for the B uy er not to insi st on a new e x tension befor e proc eeding further . Mr. Wils on’s letter of Apri l 23, 2002 state s in pa

rt ,
I n the event that rezoning is postponed or delay ed bey ond J uly , Mike may consider an additional contr act extension, howe ver the transac tion must be c losed prior to the next s chedule d seasona l planting of the sod crop ( end of Septe mber to mid October conting ent upon weather c onditions) reg ardle ss of the prope rty ’s zoning status.

We n o t e t h at wh ile the letter holds out the possibilityof an option extension (“Mike may consider an additional extension...”), it does not promise any such ex tension. Furthe r, as we stated above, the bottom of the letter also re cites, “[t] his le tter is f or information and discussion purposes
on ly a ndis not intended to be an off er t o exte nd th e contr act. A ny extension m ust be agree d upon in w riting by b oth the Buyer and S ellers.” The proof indicates that a ll parties wer e experienc ed businesspeople who wer e neg otiating at arms’ leng th. The Buy er was re prese nted by an attorne y . The e quivocal re prese ntations by the Sellers’ a g ent should not ha ve led an experience d businessperson to a ssume that a contra ct dea dline
c ou ld b e sa fe ly ig no re d. Ap pa re ntl y , the B uy e r ne ve r m a de a n e ff ort to ob ta in ano the r e xten sio n in writing as the letter

sug g ested. F urther, the Buy er could have protec ted its intere st by taking action befor e Jul y

15 to comply

with the cont ra ct as wr i t t en by “(a ) g iving notice to the Sellers of the Buy er’ s intent to purcha se and (b) depositing wit h the Escrow Ag ent an additional Option Pay ment of $50,000.00.”-10-

Our c ourts have stated on numerous oc casions that estoppe l is n o t fa v o red under our la w. Sturkie v. Bottoms , 3 10 S.W. 2d45 1, 45 3 ( Te nn . 1 95 8) ; M o o r e v
. Carter , 2 7 7 S.W .2d 427, 431 (T e nn . 1 95 4) ; Y

ork v. Vulc an Materials Co. , 6 3 S. W.3 d 3 84 , 3 88 (T e nn . Ct. App . 2 00 1) ; Grant v. Pr og ra is , 97 9 S.W. 2d 59 4, 60 2 (T e nn . C t. App . 1 99 7) ; State ex re l. Sexton v. Se vier County, 948 S.W .2d 747, 750 (Tenn. Ct. App.1997). Since the application of promissory es t o p p el in contrac t
case s cre ates a n exception to the Statute of Fra uds, it should not be applied too libe ra l l y lest the exception swallow the rule. See Shedd v. Gaylord Entertainment Co. , 118 S.W .3d 695, 698 (Tenn. Ct. App. 2003).

The B uy er r elies on the c ase of GRW Enterprises, Inc. , 79 7 S. W.2 d 6 06 . In th a t c a se , th is
c ou rt or de re d s pe c if

ic pe rf orma nc e of

a n o pti on c on tr a c t, d e sp ite the fa c t th a t th e fi na l dea dli ne date
re c ite d in the writt e n c on tr a c t wa s De c e mbe r 15 , 19 87 , a nd the op tio ne e didno t a tte mpt to e xer c ise the option until December 22, 1987.

Whil e the a

bove-de scribed f

act pattern appe ars at first g lance to present a situation sim ilar to the one bef

ore us, a deepe r look r evea ls important distinctions betwe en the two case s. The re ason for our appar ent deviation from the strict application of the de adline in GRW ha d to do wi th e ve nts that occur red at the time the parties neg otiated their contra ct. The proof showed that fr om the very beg inning of

their neg otiations, the parties intended the option to run f or ninety day s afte r the option
was e x ecute d.

T h e p ar ti e s d r a f

te d a c o n tr a c t, b u t d e lay e d it s e xe c u ti o n

. T h e y th e n a g r e e d to r e vise the contra ct so its dates would coincide with the dates of a another option c ontrac t, betwee n the plaintiff and the Gulf

Oil Company , which wished to become the ultimate owner of t he prope rty . The pa rties
a c c o r d i n g l y

a d d e d i n t e r l i n e a t i o n s a n d i n i t i a l s t o t h e u n e xe c u t e d c o n tr a c tt o r e f l e c ta c h a n g e in execution date from September 15 to September 23, 1987. H oweve r, they inadvertently

neg lected to c ha ng e the de a dli ne date a s w e ll. Th e su bs e qu e nt co ur se of de a lin g s b e tw e e n th e pa

rt ie s ( up un til the po int that th e de fe nd a nt d e c ide d n ot t o g o th ro ug h w iththe s ale ) ind ic a te d th a t th e y bo th understood the c orre ct dea dline date to be D ece mber 23.

Th e pa ro l e vid e nc e ru le do e s n ot a llo w p artie s to us e pa ro l e vid e nc e to v ary

the plain t e rm s of a w ritten contra ct. Ther e is an e x ception for sit u at i o n s wh er e it can be proven that the written terms do not acc urate ly ref lect the intentions of t he parties at t he ti me of their c ontrac ting. Id . at 613;
se e als o Gulf Insurance Co. v. Construx, Inc. , No. M1999-02803-COA- R3-CV, 2001 WL 840240 at *10 (Te nn. Ct. App. J ul 26, 2001) (no Te nn. R. App. P 11 application filed).

I n G R W, the proof w as overw helming that the dea dline date r ecited in the c ontrac t did not ref lect a tr ue mee ting of

the minds of the parties. They intended to cr eate an o ption contrac t of nin e ty day s d ur a tio n, be g inn ing on Se pte mbe r 23, 19 87 , b ut an o ve rs ig ht o n b oththe ir pa rt s preve nted the written contrac t from expressing this int ention.

I n the ca se bef

ore us, no dr afting err or wa s alleg ed, and the Buy er w as aw are from the ve ry beg inning that wh i l e it was e ntitled to pay for monthly

extensions t o its opti on rig hts, the number-11-

of such e x tensions would be limite d

. There can be no doubt that the parties r eac hed a me eting of the minds on both the I nitial Contrac t and the Amended Contra ct. The B uy er’ s estoppel ar g ument is based on conduc t by

the S ellers or their age nt that occur red months af

ter the A mended Contrac t
was e x ecute d. For

the re asons stated a

bove, we have r ejec ted that ar g ument.

IV. The judg ment of t he trial court is aff irmed. We rema nd this case to the Chance ry Court of Davidson County

for a ny further proce eding s that may

be nec essary . Tax the c osts on appeal to the appellants, J. Howard Johnson, Georg e W. Holder , J r., individuallyand/or As Attorne y -In-F act f or Wes le y Ho lde r, I I I , a ndRob e rt

F . L a nc e , a ll d

/b/ a Ga te way De ve lop me nt.

____________________________________ PATRI CI A J . COTTRELL , J UDGE