Lewis v. Muchmore

• Decision Date: 24 July 2000
• Citation: 26 S.W.3d 632
• Parties: Leslie A. LEWIS, Plaintiff/Counter-Defendant/Appellee, v. John S. MUCHMORE and Virginia L. Muchmore, Defendants/Counter-Plaintiffs/Appellants.
• Court: Tennessee Court of Appeals

26 S.W.3d 632

Leslie A. LEWIS, Plaintiff/Counter-Defendant/Appellee, v. John S. MUCHMORE and Virginia L. Muchmore, Defendants/Counter-Plaintiffs/Appellants.

Court of Appeals of Tennessee, at Jackson.

February 9, 2000.

Application for Permission to Appeal Denied July 24, 2000.

COPYRIGHT MATERIAL OMITTED

T. James Watson, Bartlett, TN, for defendants /counter-plaintiffs/appellants.

Roger A. Stone, Memphis, TN, for plaintiff/counter-defendant/appellee.

Application for Permission to Appeal Denied by Supreme Court July 24, 2000.

FARMER, J.

Leslie A. Lewis filed a detainer warrant in the General Sessions Court of Shelby County against John S. Muchmore and Virginia Muchmore alleging forcible entry and detainer (FED)¹ or unlawful detainer.² The court entered judgment for possession only and the Muchmores appealed to circuit court where the Muchmores brought a counter-complaint for specific performance of a real estate contract. Following a bench trial, judgment was entered in favor of the plaintiff, Leslie A. Lewis, restoring her to possession of the subject premises and dismissing the counter-complaint. This appeal resulted.

These parties entered into an agreement entitled Land Contract in June 1995 wherein Ms. Lewis agreed to sell and the Muchmores agreed to purchase real estate known as 4862 Durbin, Memphis, Tennessee. Pertinent parts of this agreement are as follows:

Purchaser shall pay $3,500.00 cash to be paid at time of the signing of this contract; and, to assume and pay the balance of the existing FHA loan in the approximate amount of $42,800.00 held by Boatmen National Mortgage Company, 4041 Knight Arnold Road, Memphis, Tennessee. Payments are due on the first day of July, 1995 and on the first day of each and every month until the entire loan is paid. The payments are approximately $447.00 principal, interest, taxes, and insurance. The payments will be made to the Seller at 4586 North Summer Creek, Memphis, Tennessee 38141. The Seller will remit all payments to the Boatmen's National Mortgage Company, Memphis, Tennessee, immediately upon receipt. The payments must be received in the office of the mortgagee prior to the 15th day of the month or there will be a late charge in effect.

....

Upon the purchaser obtaining a release of the Seller from the present loan or, through refinancing, prior to March 31, 1997, the Seller will provide to the Purchaser a Warranty Deed conveying title in fee simple except for the present first mortgage being assumed by the Purchaser and the existing restrictions, building lines, and easements of record. TIME IS OF THE ESSENCE TO AND IN THIS CONTRACT and the Seller does not make any promise, explicit or implied, that the date of March 31, 1997, will be extended for any reason ....

The Purchaser agrees to pay the sum of $3,500.00 and assume the existing first mortgage deed of trust on the property. To make all payments as required by the mortgagee while in the premises. Further, the Seller will maintain the property and make necessary repairs at the Purchaser's expense without any obligation to the Seller. Further, the Purchaser agrees that he will obtain a release of the Seller from the obligation of the existing first mortgage or obtain financing and pay off the existing first mortgage thereby relieving the Seller of any obligation for payment of the existing first mortgage. The Seller agrees that this release will be made on or before March 31, 1997, and that failure to obtain such release will nullify this contract, that he will vacate the premises immediately, and the $3,500.00 down payment is forfeited without any refund being due. Should the Purchaser default by failure to pay monthly payments, obtaining a release, or in any other manner, the Seller may proceed with Forcible Entry and Detainer Warranty sic and recover possession of property and judgment for any paid notes while the Purchaser is in possession.

....

The Purchaser agrees to pay reasonable attorney fees and court costs if litigation is entered to regain possession should purchaser default on the terms of this instrument.

The Purchaser agrees to pay all 1995 real estate taxes on the property.

To keep the premises in accordance with all police, sanitary and other regulations imposed by any governmental authority.

....

If the Purchaser shall fail to perform this contract or any part thereof, the Seller, ten days after such default, shall have the right to declare the same forfeited and void, and retain whatever may have been paid hereon, and all improvements that may have been made upon the premises together with additions and accretions thereto, and consider and treat the Purchaser as his tenant holding over without permission and may take immediate possession of the premises, and the Purchaser and each and every other occupant remove and put out. In all cases where a notice of forfeiture is relied upon by the Seller to terminate rights hereunder, such notice shall specify all unpaid moneys and other breaches of this contract and shall declare forfeiture of this contract effective in ten days after service, but not sooner than sixty days after default unless such money is paid and any other breaches of this contract are cured within that time.

If default is made by the Purchaser and such default continues for a period of ten days or more, and the Seller desires to foreclose this contract in equity, then the Seller shall have at her option the right to declare the contract breached, notwithstanding anything herein contained to the contrary.

Any declaration, notices or papers necessary or proper to terminate, accelerate or enforce this contract shall be presumed conclusively to have been served upon the Purchaser if such instrument is enclosed in an envelope with first class postage fully prepaid if said envelope is addressed to the Purchaser at the address set forth in the heading of this contract or at the latest other address which may have been specified by the Purchaser and receipted for in writing by the Seller, and if said envelope is deposited in a United States Post Office Box.

Notice of default of payment by the Purchaser is expressly waived. Further, any statutory right of redemption is expressly waived.

The pivotal issue at trial was whether the Land Contract, which by its explicit terms expired on March 31, 1997, was extended by a modification agreement between the parties. The trial court held that it was not and the appellants take issue with this finding.

The issues as presented in the appellants' brief are as follows:

1. Did the trial court err in refusing to apply the Doctrine of Res Judicata in that the issue of the right of possession of the real property as between these parties arising under the LAND CONTRACT executed by them on 21 June, 1995, was tried before a court of proper jurisdiction, a verdict thereon was rendered in favor of the Defendants in that cause, and no appeal was taken therefrom?

2. Did the trial court err in refusing to dismiss the second Detainer Warrant as being the inappropriate method to join issues of legal versus equitable title under the Doctrine of Equitable Conversion and to determine the right of possession under an executory real estate sales contract?

3. Did the trial court err in refusing to apply the Doctrine of Prior Suit Pending in that the issue of the right of possession of the real property as between these parties arising under the LAND CONTRACT executed by them on 21 June, 1995, was in the nature of a compulsory counter-complaint under Tennessee Rules of Civil Procedure 13.01 in the Defendants' Chancery Court case and should have been brought in that pending cause for a complete adjudication of the parties' rights and obligations?

4. Did the trial court err in refusing to dismiss Plaintiff's second FED³ action based upon the contractual requirements of paragraph 3(d) of the operative LAND CONTRACT which allowed the Defendants a period of sixty days after notice of default to cure any alleged default inasmuch as the second Detainer Warrant was filed on 2 October, 1997, less than sixty days after the Plaintiff's letter of 21 August, 1997, assuming that letter is construed as the requisite notice being given?

5. Did the trial court err in refusing to dismiss Plaintiff's second FED action based on her persistent refusal to cooperate with the Defendants' efforts to process the assumption of the first mortgage and therefore the full performance of their obligations under the LAND CONTRACT by refusing to execute a release which would allow the commencement of that process, such refusal being in violation of the obligation or good faith imposed in every contract under the laws of this state?

With respect to the issue of res judicata, the counterclaim filed by the Muchmores states in paragraph 18 as follows:

That on 16 July, 1997, the Counter-Defendant filed an action of Forcible Entry and Detainer against the Counter-Plaintiffs in the General Sessions Court at docket number F130400F, the trial of which cause on 21 August, 1997, resulted in a verdict in favor of the Counter-Plaintiffs denying the Counter-Defendant's assertion to a right of possession of said property under the "Land Contract" of 21 June, 1995, and that the Counter Defendant-filed no appeal from said judgment within the time allowed by law.

The answer to the counterclaim states as follows:

On information and belief, Counter-Defendant admits the allegations contained in paragraph 18 of the Counter-Complaint.

Notwithstanding the admission in the answer, Ms. Lewis argues on appeal that there is no evidence in the record that the prior FED was decided on its merits. The admitted allegation in the counterclaim likewise does not aver that the matter was disposed of on its merits. The doctrine of res judicata is a rule that an existing final judgment rendered upon the merits by a court of competent jurisdiction is conclusive as to the rights of the parties and their privies and...