DAVIDSON v. WILSON, 7124
| Decision Date | 18 June 2010 |
| Docket Number | No. 7124,No. M2009-01933-COA-R3-CV,7124,M2009-01933-COA-R3-CV |
| Parties | ROBERT J. DAVIDSON and wife, JEANETTE DAVIDSONv.RILEY WILSON |
| Court | Tennessee Court of Appeals |
ROBERT J. DAVIDSON and wife, JEANETTE DAVIDSON
v.
RILEY WILSON
No. M2009-01933-COA-R3-CV
Court of Appeals of Tennessee
Filed June 18, 2010
Michele L. Coffman, Chattanooga, Tennessee, for the appellants, Riley Wilson
John C. Cavett, Jr., Chattanooga, Tennessee, for the appellees, Robert J. Davidson and wife, Jeanette Davidson
This case involves a contract for the sale of real property and a subsequent verbal agreement. The trial court found that the seller breached the contract. We reverse and remand.
Tenn. R. App. P. 3; Appeal as of Right; Judgment of the Chancery Court Reversed and Remanded
Alan E. Highers, P.J., W.S., delivered the opinion of the Court, in which David R. Farmer, J., and J. Steven Stafford, J., joined.
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Alan E. Highers, P.J., W.S
Robert and Jeanette Davidson are residents of Florida. In 2005, the Davidsons saw an advertisement in their local newspaper regarding property for sale in Tennessee. The seller, Riley Wilson, was also a resident of Florida. Mr. Wilson, who had been in the real estate business for twenty years, had recently purchased a 200-acre tract of land in Tennessee, and he intended to divide the property and sell it in smaller parcels. The Davidsons contacted Mr. Wilson and arranged to meet him in Tennessee to view the property.
In early November 2005, the Davidsons met Mr. Wilson in Tennessee, and the parties drove around the property. On November 5, 2005, the Davidsons and Mr. Wilson executed a "Contract for the Sale of Real Estate," which provided that the Davidsons would purchase "50 acres; being a portion of the Wilson Tract (203.5 acres) situated on Hwy 27 Sequatchie Tennessee Lot #2." The purchase price was $124,750. The Davidsons paid a $5,000 deposit to Mr. Wilson, which, according to the contract, would be retained by him if the Davidsons wrongfully failed to carry out the terms of the agreement. The contract listed the closing date as December 5, 2005.
On the closing date of December 5, Mr. Wilson executed the closing documents in Tennessee and placed them in the mail to be sent to the Davidsons in Florida. The warranty deed sent to the Davidsons described the property as "50.00 acres, more or less." It also stated, "Legal description provided by parties without the benefit of a survey." In addition, the "Commitment to Insure" prepared by the title insurance company provided that no insurance coverage was afforded as to the amount of acreage contained in the property, and there was also an exception to coverage for facts that would be disclosed by an accurate survey of the premises. When the Davidsons received the closing documents on December 8, they were concerned by this language. Mr. Davidson subsequently contacted Mr. Wilson regarding the concerns. It is undisputed that both Mr. Davidson and Mr. Wilson contacted a local surveyor about obtaining a survey of the property. However, before the survey was completed, Mr. Wilson sent a letter to the Davidsons, dated February 27, 2006, stating that he was returning their $5,000 deposit and rescinding the contract. The Davidsons later discovered that Mr. Wilson had conveyed the property to a third party on February 24, 2006, for $150,000.
The Davidsons filed a complaint in the chancery court of Marion County, Tennessee, alleging that Mr. Wilson's actions constituted breach of contract, fraud, misrepresentation, and a violation of the Tennessee Consumer Protection Act. At a bench trial on May 20,
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2008, the trial court heard testimony from Mr. Davidson, Mr. Wilson, and another individual who had purchased land from Mr. Wilson. It was undisputed that when the parties originally signed the contract on November 5, Mr. Wilson had provided the Davidsons with a copy of a "preliminary survey" of the entire 200-acre tract. However, the lots that Mr. Wilson intended to sell separately had not been individually surveyed. Instead, Mr. Wilson pencilled in boundary lines on the overall survey, pointed to landmarks when the parties viewed the property, and provided the buyers with a "legal description" of each lot. Mr. Davidson testified that he did not know how the survey issue would be addressed until he received the closing documents, and he said that he was concerned by the exceptions in the title insurance paperwork once he received those documents. The parties had several conversations after the Davidsons received the closing documents. However, their testimony conflicted regarding the nature and extent of those conversations.
Mr. Davidson testified that when he called Mr. Wilson after receiving the closing documents to discuss his concerns, Mr. Wilson agreed to have a survey done before closing and even said that he would contribute $1,000 toward the cost of obtaining the survey. According to Mr. Davidson, Mr. Wilson indicated that he would make arrangements with a surveyor after he returned from a trip to California. When the parties spoke again a couple of weeks later, Mr. Wilson allegedly instructed Mr. Davidson to "go ahead and order the survey" from Clarence Howard, a local surveyor. Mr. Davidson testified that after he contacted the surveyor recommended by Mr. Wilson, he called Mr. Wilson again and informed him that the surveyor said that it would be a couple of months before he could get started due to the winter weather. According to Mr. Davidson, he told Mr. Wilson that the surveyor was supposed to call when he was going to begin, and that the surveyor would be expecting a check up front, although the price was not yet "set in stone." Mr. Wilson then allegedly told Mr. Davidson that he would just split the cost of the survey with him "50/50." Mr. Davidson testified that this conversation took place around the first or second week in January of 2006, and that Mr. Wilson did not express any concern about the fact that the closing date had passed. According to Mr. Davidson, he was somewhat concerned about the past closing date, but Mr. Wilson assured him that "it happens all the time" and said not to worry about it. Mr. Davidson testified that in the following weeks, he contacted the surveyor a couple of times, but he did not have any further contact with Mr. Wilson because he understood that they were simply waiting on the survey to be completed. Mr. Davidson said that the next communication he received from Mr. Wilson was the letter stating that Mr. Wilson was rescinding the contract and returning their $5,000 deposit. Mr. Davidson stated that he received the letter on March 3, and that he immediately called Mr. Wilson to ask what was going on. According to Mr. Davidson, Mr. Wilson basically said that he was tired of waiting and that he was putting the property back on the market. Mr. Davidson said he later learned that Mr. Wilson had already sold the property and cancelled the order for the survey prior to sending the rescission letter.
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Mr. Davidson testified that all of the parties' conversations were by telephone and that they did not execute a new contract or other document. He said he did not think that it was necessary to have another written contract because the parties continued to talk after the scheduled closing date passed, and they had both spoken with the surveyor. Mr. Davidson said that Mr. Wilson never seemed to have a problem with waiting on the survey, and that the parties' conversations were all very cordial until Mr. Wilson sent the rescission letter.
Mr. Wilson's version of the events was quite different. He acknowledged that because he did not mail the closing documents from Tennessee until December 5, there was no way that the sale could close on the scheduled closing date. He explained that his closings did not always occur as scheduled and that there was usually a delay of at least one day. He further testified, however, that he did not extend the Davidsons' closing date, and he claimed that he insisted that the Davidsons go ahead and close on the transaction. He testified that when Mr. Davidson contacted him with his concerns about the lack of a survey, he told Mr. Davidson that he would send him a "survey memorandum," which he often provided to his buyers, stating that the Davidsons could obtain a survey of the property within one year, and in the event that there was a discrepancy in the acreage, the price could be adjusted upward or downward accordingly. Mr. Wilson produced a copy of the survey memorandum that he allegedly faxed to Mr. Davidson on or about December 8. It was signed by Mr. Wilson and dated December 8, but the space designated for the buyer's signature was left blank. In short, Mr. Wilson said that he wanted Mr. Davidson to "close his escrow" and then the parties would "resolve the issues" after the survey was performed. However, Mr. Wilson said that Mr. Davidson refused to close on the transaction or place his purchase money in escrow despite his repeated requests that he do so. Mr. Wilson claimed that he told the Davidsons on more than one occasion that if they did not "close the escrow" he was going to sell the property to someone else, but they refused to pay.
Mr. Wilson initially testified that he did not agree to do anything regarding obtaining a survey of the property. He denied agreeing to pay $1,000 or one-half of the cost of the survey. When asked whether he called Clarence Howard, the local...
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