# FILED
October 26, 1998 Cecil Crowson, Jr. Appellate C ourt Clerk IN THE COURT OF AP PEALS OF TENNESSEE AT JACKSON

_______________________________________________________ ) LOYAL FEATHERSTONE ) Shelby County Chancery Court CONSTRUCTION , ) ) Plaintiff/Appellee. ) ) VS. ) C.A. No. 02A01-9709-CH-00213 ) ROBERT COLEMAN, ET UX , ) ) Defendants/App

ellants. ) )

______________________________________________________________________________ From the Chancer

y Court of She

lby County

at Memphis Honorable Neal Small, Chancellor
John C. Scheeper, Jr. , SCHEEPER LAW FIRM, Memphis, Tennessee Attorney fo

r Defendants/Ap

pellants. William L. Hendricks, Jr. , Venita Marie Mar

tin , GLANKLER BROWN, PLL C, Memphis, Tennessee Attorney for Plaintiff/Appellee. OPINION FIL

ED: REVERSED AND REMAN DED

FARMER, J. CRAWFORD, P.

J., W.S. : (Concurs) LILLARD, J. : (Concurs)Defendants Robert a

nd Janice Coleman appeal the trial court’s final judgment awarding Plaintiff/Appellee Loyal Featherstone Construction, I nc., the sum of $30,06 7 .18 in this breach of contract action. We rever

se the trial court

’s judgment bas ed on our conclusion that the record contains insufficient evid ence to support th e trial court’s finding that the Colemans breached the subject contrac

t.

The construction compa n y instituted this breach of contract action in June 1996 when it filed a complaint seeking damages and other relief against the Colemans. The complaint alleged that in April 1995 the parties entered into a contract for the sale of a newly con str ucted residence locatedat 7540 Starfire Cove in Memphis, Tennessee. The contract, wh ich was atta

ched to the complaint andadmitted in the answer, contained the following provisions relative to the Col emans’ obligation to close the sale upon the construction company’s completion of the home:

It is unde rstood and agreed between the parties that Seller shall be deemed to have performed this Contract as to construction of the improvements when a clear final inspection has been obtained

from the FHA and/ or DVA and/or the Shelby County Building Departm ent. . . . Purchaser shall completely inspect the residence prior to closing with Seller or Seller ’s Agent. Purchaser and Seller shallagree in writing, those items that will be repaired or completed by Seller within a

reasonable

time. Seller will ma

ke his best effor

t to correct all reasonable defects; however, it may not be possible to

do so prior to closing.

Purchaser agr

ees t o immedia

tely close th

e said loan and purch

ase the [su

bject] Propert y within three (3) working days after the completionof P rop ert y, loan approval, and preparation of closing documents. Failure of Purc haser to close wit

hin three (3) working days after

these conditions ha

ve been met can r

esult in forfeiture of a

ll monies paid to Seller, or in the alternativ e, a charge of Twenty-five Dollars ($25.00) per d ay sha ll be assessed ag

ainst Purchaser for ev ery d ay after t

he three (3) day

s Purchaser fail

s to close this sale in order to reimburse Selle r for costs in holdin g this Property by Seller for Purchaser
.

The gravamen of the construction company’s com plain t was that the Colemans breached the contract by failing to close the sale of the property by the scheduled closing date of January 31, 1996. The complaint further alleged that on April 9, 1996, the Colemans’ counsel recorded thecontract with the Shelby

County Register’s Office at Instrument Number FU 2741, thereby cr eating a cloud on the titleof the subject pro

perty. The

Colemans responded to

the complaint by filing an answer and a countercomplaint in which they sought specific performance of the contract and other relief.At trial, most of the evidence was undisputed. The initial closing date was scheduled for August 31, 1995. On that date, however, the construction of the house was incomplete, so the parties agreed to extend the closing date by several months. On January 2 or 3, 1996, the parties compiled a p unch list containing approximately twelve items which needed to be completed or corrected. Loyal Featherstone, the owner of the cons

truction company

, agreed to com

plete or correct most of the items on the punch list. On January 18, 1996, however, Featherstone sent a letter to the Colemans in which he refused to reframe the upstairs bathroom ceiling as requested by the Colemans. Featherstone explained that reframing the bat hro om c eil ing w oul d be too cos tly, and he proposed an alternate method of addressing the problem, such as moving the shower head.

On January 26, 1996, at the request of the bank which had approved the Cole

mans’ mortgage loan, an appraiser performed a final inspection and appraisal of the home. The appraiser indicatedthat all construction work was complete on that date. The bank previously had given its final approval of the Colemans’ mortgage l oan applicat ion on December 1 8, 1995, subject to performance

of the final appraisal. Taking the position that all conditions precedent for closing the saleof the home had

been met, therefore, the construction company insi

sted that the Colema

ns close the sale on or before January 31, 1996.

The Colemans did not attend the scheduled clo sing, and, thus, th

e closing did

not take place by January 31, 1996. The Colemans decided not to attend the closin

g because, in

their opinion, the construction of th

e home was not comp

lete. According

to the Colemans,

Loyal Featherstone

had failedto complete or correct many of the items on the punch list. In par t icular, the Colemans contended

that the upstairs bathroom ceiling was too low, and they di d not want to close when Featherstonehad refused

to repair the ceiling. Janice Coleman stated that the Colemans would have closed the sale if Featherstone had corrected the height of the bathroom ce iling.

On February 8,1996, a Shelby County building inspector inspected the subject house andissued a final inspection report indicating

that the house

was substantially

complete and that

it compli ed with all applicable codes. At the Colemans’ request, however, the building inspector returned to the property on March 7 or 8 to reinspect the prope rty. On that date, the building inspector discovered t

hat he had made a mistake in issuing the final inspection report because a1 These proceedings were bifurcated in that the liability phase of the trial was conducted on December 18, 1996, while the hearing on damages took place on Februa ry 24, 1997. portion of the ceiling in the upstairs bathroom was too low and did not conform with the building code s. After the building inspector discussed the code violation with Loya l Featherstone, Featherstoneagreed to correct the height of the bathroom ceiling. By Apr il 1, 1996, when the building inspector again returned to the property, the bathroom c eiling had been corrected.
According to the building inspector, he ordinarily did not miss code violations of the type involving the bathroom ceiling, but occasiona lly v iolations did go undetected in the final inspection. In such a situation, the building inspector’s usual practice w as to ask the builder to correct the problem. I

f the builder did no

t c orrect the prob lem, the inspector would withdraw his final inspection r e port. In this case, the building inspector did not withdraw the final inspection report because Fea

therston e had corrected the violation by April 1, 1996, when the inspector returned to the property

a second time. The building inspector stated, however, that he would have withdrawn the f inal inspection report if he had discovered that the problem had not been corrected when h e returned on April 1.

Inex pli cabl y, the record

is silent as to any efforts to close the sale of the property after the scheduled closing date of January 31, 1996. The construction company presented

no testimony
or other evidence that Loyal Fea therstone attempted to schedule another closing date a fte r January 31, 1996, when the scheduled closing failed to take place; or after February 8, 1996, when the Shelby County building inspector perfo

rmed his final inspection of the property; or after April 1, 1996, when Featherstone completed the work on the upstairs bathroom ceiling at the request of

the building inspector.

Although Loyal Featherstone failed to testify

as to any ef

forts to close the sale of the property after January 31, 1996, Robert Coleman testified that when the Colemans met the building inspector at the property on March 7 or 8, Featherstone infor med the Colemans that they were not allowedon the property, and he threatened to call the police. Moreover, at the subsequent hearing
on damages, 1 Featherstone admitted that, sometime in March 1996, he indicated that he would not sell the property

to the Colemans bec

ause they had breached the contract by not attending the January1996 closing.

At the conclusion of the liability phase of the proceedings, the trial court found that the Colemans breach

ed the contract b

y failing t o close the sale of

the house. At the subsequent hearing on damages, the trial court fo und the c onstruction company’s total damages to be $30,067.18, and the court entered a judgment for that amount in favor of t h e company. The trial court’s judgment also terminated the subject contract and ordered it expungedfrom the records of the Shelby County Register’s Office . This appeal by the Colemans followed.

On appeal, the Colemans have abandoned their claim for specific performance

and have limited their issues on appeal to whether the tri al cou rt erred in finding them to be in breach of the subject contr

act and whether

the court erred

in awarding dam

a ges to the construction
com pan y. This appeal, therefore, requires usto determine whether theconditions precedent of the subject contract had occurred so as to impose upon the Colemans the obligation to close the sale of the house by the scheduled closing date of January

31, 1996. Contrary to the trial court’s ruling, we conclude that

the necessary conditions

precedent had not occurred and, thus, that the Colemans had no obligation to close by January 31, 1996.

At trial, the construction company t ook the position that the occurrence of three conditions triggered the Colemans’ obligation to close the sale of the home: (1) the approval of the Colemans’ mortgage loan application by the bank; (2) the final appraisal performed by the appraiser at the bank’s request; and ( 3) the final inspection performed by the Shelby County building inspector. The record contains undisputed evidence that the Colemans’ loan was approved on December 18, 1995, and that the final appraisal was performed on J anuary 26, 1996. It also was undisputed, however, that the final inspection was not perf ormed by the building inspector until February 8, 1996, mor e th an o ne w eek a fte r th e sch edu led clo sin g dat e of J anu ary 3 1, 1996. In light of the undisputed evidence that the third con diti on precedent had not occurred by the scheduled closing date, we conclude that

the Colemans had no

obligation to clos

e by January

31, 1996, and, thus,

that they did not breach the contract by failing to close on that date.

On appeal, the construction company co ntends that the Cole

mans were requi

red to2 The record on ap peal does not inclu

de any tria

l exhibits. close by January 31, 1996, because the contra ct’s final ins pect ion requirement was satisfied on January 26 , 19 96, when the appr aiser for the ba

nk performed his f

inal inspection an

d appraisal. Spe cif ica lly, the construction company contends that the bank appraiser’s final inspection satisfied the con tract’s req uirement of obtaining “a clear final inspection . . . from the FHA and/or DVA and/or the Shelby Cou

nty Building

Department.” I

n su pport of this contention, the construction company’sbrief asserts that the“bank appraiser’s certification [was] used for the FHA inspection.”

We conclude that this argument i s without merit. After carefully reviewing the recor d
on appeal, 2 we are u na ble to find any testimony or other evidence w hich would equate the bank appraiser’s final inspection a nd appraisal with

a “clear final inspection . . . from the FHA.” We also notethat this is not the kind of fact of which this court may take judicial notice. See Ottinger v. Ottinger , No. 03A01-9801-CV-00027, 1998 WL 497997, at *2 (Tenn. App. Aug. 20, 1998); In re Dowling , No. 01A01-9706-PB-00268 , 1998 WL 13067, at *4 (Tenn. App. Jan. 16, 1998); T.R.E. 201(b).

We further conclude that the recor d fails tocontain any evidence to support the finding that the Colemans breached the subject contract by failing or re fusing to close thesale after the January 31, 1996, closing date. In order to recover for a purchaser’s bre ach of a contract for the saleof realty,

the seller must dem

onstrate that he (

the seller) was “

able and ready to perform

his part of the contract, u nless hi s inability was due to some act of the purchaser.” 92 C.J.S. Vendor & Purchaser§ 530 (1955) (footnotes omitted). Specifically, the seller “must

perform, or off

er to perform, his part of the con tract as a condit

ion precedent to h

is right to maintai

n an action for its breach by the purchaser, unless prior to the time set for performance the purchaser has repudiated the contract or

signified his unw

illingness to comply therewith.” Id .; accord Lafferty v. Pate , No. 01A01-9303-CH-00085, 1993 WL 312682, at *3 (Ten n. App. Aug. 18, 1 993) (indicating that, in order to maintain breachof contract act ion, seller must pro

ve readiness an

d willingness

to perform or show sufficient justification for not having done so).

In the present case, the construction company failed to present any

proof regarding3 Inasmuch as t he parties previ

ously had exte

nded the closing

date, the partie

s apparently did not consider time to be of the essence in the performance of the contract. See Tatum v. Worsham , No. 03A01-9507-CH-00219, 1996 WL 87453, at *2 (Tenn. App. Mar. 1, 1996), perm. app. denied

(Tenn. May 28, 1996).
4 Inasmuch as t

he record conta

ins no evidence th

at the constructio

n company of

fered to perform the contract after February 8, 1996, when the building inspector performed his final inspection, we need not address what effect, if any, the inspec tor’s subsequent discovery of the ceiling’s code violation had on the Colemans’ obligation to close the sale. its readiness or willingness to perform the subject contract after the Colemans failed to close by the January 31 closing date. 3 As previously discussed, the construction company presented no evidence that it offered to perform the contract after the Januar y 31 clo sin g dat e, af ter the Febr uary 8 inspection by the Shelby

County building inspector, or

after April 1 by which time the construction compan y had corrected the bathroom ceiling’s code violation. The only e vidence on this issue suggests that, after January 31, 1996, Loy al Featherstone no longer wished to sell the proper

ty to the Colemans.

The construction comp any also pre

sented no evidenc

e that its f

ailur e to offer to perform was justified. Although the Colemans refused to close the sale on January 31, 1996, as we previously

explained, the Colemans had no obligation to close at that time. Moreover, although the Colemans insisted that

the construction c

ompany rep

air the bathroom c

eiling and other

problems, the record contains no evidence that the Colemans actually repudiated the c ontract at any time either before or after January

31, 1996. Under the

se circumstance

s, we hold that the construction company was not entitled to r

ecover for the C

olemans’ breac

h of contract. 4

We reverse that portion of the trial court’s judgment finding the Colemans in breach of contract and awarding damages to the construction company , and we remand this cause for further procee dings consistent with this opinion. Inasmuch as the Colemans have abandoned the i r counterclaim

for specific performance, we leave in effect that portion of the trial court’s judg ment terminating the subject contr ac t and ordering it

expunged from the

records of the Sh

elby County Register’s Office. Costs

of this appeal are taxed to theconstruction company, for which execution may i ssu e ifnece ssa ry.

____________________________________ FARMER

, J.______________________________

CRAWFORD, P.J., W.S. (Conc urs)

______________________________ LILL ARD, J. (Concurs)