Opinion ID: 2982320
Heading Depth: 2
Heading Rank: 3

Heading: On or before the end of the next

Text: succeeding 6 months: $11,237.00 per acre Each conveyance shall be for no less than thirty-four (34) acres. During the term of this Contract Patterson agrees to approve those changes to the Case No. 13-6029 8 OSRD which are approved by the City of Brentwood. 2. The conveyance(s) shall be by general warranty deed. The Property shall be conveyed subject to the OSRD zoning requirements, the encumbrances listed on Exhibit B hereto and current property taxes, which shall be paid by Anderson. Similarly, the 1999 Purchase Contract provided in pertinent part as follows: PURCHASE CONTRACT WHEREAS David G. Patterson, Jr. (“Patterson”) owns approximately 36.74 acres of land located in Williamson County, Tennessee, . . . (the “Property”); and WHEREAS Gerald Anderson (“Anderson”) desires to contract to purchase said Property; THEREFORE, Patterson and Anderson agree as follows: 1. Patterson agrees to sell to Anderson the Property on or before January 9, 2000 for $9,073.00 per acre. Said conveyance shall be for no less than the entire Property. During the term of this Contract Patterson agrees to approve those changes to the OSRD which are approved by the City of Brentwood. 2. The conveyance(s) shall be by general warranty deed. The Property shall be conveyed subject to the OSRD zoning requirements, the encumbrances listed on Exhibit B hereto and all property taxes, which taxes shall be paid by Anderson. It is evident, as the district court concluded, that although the contracts expressly bound plaintiff to sell the property to defendant, neither contract expressly stated that defendant agreed to buy the property back from plaintiff. Ultimately, however, we agree with the district court’s assessment that the absence of such language leaves it unclear whether the contracts were intended to be option contracts (as defendant claimed) or repurchase agreements (as plaintiff claimed). Case No. 13-6029 9 Arguing to the contrary, defendant asserts that the absence of any explicit obligation to repurchase the property demonstrates an unambiguous intent to create an option (and not an obligation) to repurchase the property as a matter of law. The Tennessee case cited by defendant in support defines an option as an obligation by which the owner of property binds himself to sell but leaves it to the other party’s discretion whether to buy at a fixed price within a certain time. City of Lebanon v. Baird, No. 87-24-II, 1987 WL 12988, at  (Tenn. Ct. App. June 24, 1987) (quoting Black v. Maddox, 30 S.E. 723, 724 (1898)), rev’d on other grounds, 756 S.W.2d 236 (Tenn. 1988). This definition is not in dispute; the question, however, is whether the purchase contracts here unambiguously leave it to defendant’s discretion whether to repurchase the property at all. Here, ambiguity exists because the meaning is uncertain and the contracts are susceptible to being fairly understood either as granting an option to repurchase at defendant’s discretion or as an agreement to repurchase the property in the future at the specified intervals and prices. It is relevant, albeit not dispositive, that the purchase contracts contained no mention of an option or any provisions for exercising the purported option; included recitals that expressed the defendant’s (albeit nonbinding) desire to purchase the property; and were both titled and referred to in written extension agreements as “Purchase Contracts.” Further, defendant retained responsibility to pay the taxes on the property held by plaintiff subject to the purchase contracts. It is also relevant that although the Real Estate Sales Contract that initiated the 1997 transaction also failed to include any express obligation to buy the property, there was never a Case No. 13-6029 10 claim that it was actually intended to be an option contract. Nor is the ambiguity resolved by defendant’s claim that the fact that the arrangement was intended to be a loan was still consistent with an intention to create an option contract. Specifically, defendant explained that he deeded the property to plaintiff for an amount equal to half of its fair market value with the intention to create a non-recourse loan with the only remedy being plaintiff’s retention of the property in the event of default. It is not clear whether defendant means to say repayment of the loan was optional; but, even so, it does not alter our conclusion that the purchase contracts did not unambiguously manifest an intention to create an option (and not an obligation) to repurchase the property. Because the purchase contracts were ambiguous in this regard, defendant’s motion for summary judgment was properly denied and parol evidence was properly considered at trial to determine the parties’ intent. See Allstate Ins. Co. v. Watson, 195 S.W.3d 609, 612 (Tenn. 2006).