Jackson v. Crump

2022 Ark. App. 137

643 S.W.3d 781

Patty JACKSON, as Executrix of the Estate of Tommy Williams; and Vela Williams, Appellants

v.Ronnie CRUMP, Appellee

No. CV-19-661

Court of Appeals of Arkansas, DIVISION III.

Opinion Delivered March 30, 2022

Parker Hurst & Burnett PLC, Jonesboro, by: Donald L. Parker II and Ronald S. Burnett, Jr., for appellants.

Lyons & Cone, P.L.C., Jonesboro, by: Jim Lyons and David D. Tyler, for appellee.

RAYMOND R. ABRAMSON, Judge

This case is a companion to Jackson v. Crump , 2022 Ark. App. 136, 643 S.W.3d 788, also handed down today. In both cases Vela and Tommy Williams (the Williamses) appeal the circuit court's orders granting specific performance of an option for the purchase of real property in favor of appellee Ronnie Crump (Crump).¹ The Williamses argue that both options violate the statute of frauds and are unenforceable. The Williamses also argues other different points in each case. We affirm.

I. Background

On May 29, 2007, in connection with their purchase of a seventy-two-acre tract of farmland from Lillian Crump, the Williamses granted an option to purchase to appellee Ronnie Crump. Lillian Crump is the mother of Ronnie Crump. The option, after identification of the parties and the legal description of the property, provided as follows:

1. This Option may be assigned to BRANDON CRUMP, but no other person.

2. Notification date is defined as not earlier than TEN YEARS after the date of the recording of a deed conveying the above described property from LILLIAN CRUMP to TOMMY AND VELA WILLIAMS, and not later than 30 days after that date. This Option is to be considered personal to CRUMP and his rights under this agreement may not be assigned to any party other than Brandon Crump.

3. Exercise of Option. If on or before midnight of notification date, CRUMP shall notify the WILLIAMS of CRUMP'S election to exercise the option hereby granted by ordinary mail, postmarked prior to the deadline indicated and addressed to WILLIAMS ..., a contract shall thereupon result in which the WILLIAMS agrees to sell and CRUMP agrees to purchase the above-described property for Two hundred, fifty five thousand dollars ($255,000.). In the event that notice in accordance with the terms hereof of the election by CRUMP to exercise the option herein granted is not given within the time indicated, this option shall at once cease and terminate and CRUMP shall have no further rights hereunder.

4. Option Purchase Price. The purchase price of the above-described property shall be $255,000.

5. Title Documents. Upon the exercise of this option within the specified time by CRUMP, WILLIAMS shall provide to CRUMP as promptly as possible a commitment for title insurance, without exceptions other than for current taxes, for merchantable fee simple absolute title to the lands described above. If other exceptions are noted, WILLIAMS shall have a reasonable time within which to cure the same. In the event that the CRUMP does not assert any material defects in the title offered, or if the title is found to be acceptable to the parties, a closing date shall be set for a time mutually agreeable to the parties, but not later than ten (10) days following the expiration of the length of time necessary to cure said objectionable defects. In the event that the title is not found to be merchantable and the defects therein are not cured by the WILLIAMS within a reasonable time, CRUMP shall have the right and option to cancel and terminate the then-existing contract for the purchase of the property and to be refunded the amount paid for the option, BUT SHALL ALSO BE ENTITLED TO SPECIFIC PERFORMANCE and/or consequential damages for failure of WILLIAMS to deliver merchantable title.

6. Closing. On the closing date, the WILLIAMS shall make, execute and deliver to CRUMP a Warranty Deed in proper form conveying a merchantable fee simple absolute title to the property under consideration subject only to liens for subsequent taxes. The purchase price shall be paid, in cash, at the closing by CRUMP TO WILLIAMS.

7. Taxes. All taxes will be paid by WILLIAMS at or prior to the closing date.

8. General. Time is of the essence of this agreement, and if the CRUMP shall not have exercised this option to purchase within the time and in the manner herein stated, all of the CRUMP'S rights hereunder shall at once cease and terminate.

9. Recordation of instrument. The parties agree that this option shall be placed of record at the Craighead County Circuit Clerk's and ex-officio recorder.

10. This option to purchase is subject to the rights of any lien holder of record at the time of exercise of the option. Williams shall not encumber the property with any lien in an amount that exceeds the option price.

11. This option to purchase shall be binding on the Grantors, Williams’, their successors, heirs and assigns.

12. Special condition: This property is subject to a lease between Williams as the Landlord and Crump as the Tenant. The right to exercise this option is conditioned upon Crump fulfilling the terns of that lease attached hereto as exhibit A.

A "Cash Farm Lease" was executed contemporaneously by the parties allowing Crump to farm the seventy-two-acre tract for a ten-year period for an annual cash rent of $9,300 payable to the Williamses by December 31 of each crop year. The lease provided that any failure by Crump to pay rent terminated the lease. The lease also provided that, in addition, the option becomes void.

The deed conveying the property from Lillian Crump to the Williamses was recorded on May 29, 2007.

On June 9, 2009, the Williamses and Crump entered into a second contract that terminated the lease.² The 2009 contract provided as follows:

4. That it is the desire of the [sic] Crump and Williams to terminate both of said leases at this time.

5. That it is in the best interest of both parties to terminate said leases at this time and the parties do hereby agree to terminate said leases at this time. All provisions of said leases are hereby null and void and shall not be enforced by Crump or Williams.

6. That as consideration for terminating said leases, Williams agrees to pay and Crump agrees to accept the amount of Ten Thousand Dollars ($10,000.00).

Attached to the contract were copies of the leases being terminated. Crump discontinued paying the cash rent and farming the seventy-two-acre tract thereafter.

Lillian Crump died in December 2010.

Crump exercised the option by sending the Williamses letters from both himself and his attorney dated June 7, 2017. The Williamses refused to comply.

II. The Litigation

Crump filed suit on December 22, 2017, seeking specific performance to compel the Williamses to convey the property to him. The Williamses answered, denying the material allegations. They also asserted that the option was contingent upon Crump's performance of his obligations under the lease and that he had failed to perform. The Williamses also pled the statute of frauds as an affirmative defense. The lease was attached as an exhibit to the answer.

The two cases proceeded on parallel tracks. There were several disputes about the Williamses’ cooperating and answering discovery, and Crump filed several motions to compel. During these earlier disputes, the circuit court awarded Crump $2,500 in attorney's fees as a sanction for discovery violations in both cases. Finally, in November 2018, the circuit court issued similar orders on the outstanding discovery disputes. The court found that the Williamses did not file timely responses to the discovery and had not acted in good faith in complying with earlier discovery orders. The court did not strike the Williamses’ answer but said it would reconsider if there were further discovery violations. The court imposed other sanctions, including limiting the Williamses to using witnesses and documents already identified in the discovery responses.

On December 31, 2018, the Williamses moved for summary judgment arguing that Crump had not complied with the special condition precedent to his exercise of the option. The motion asserted that Crump had failed to fulfill the terms of the lease, including failing to pay rent, which terminated the lease. According to the Williamses, the termination of the lease also voided Crump's option to purchase. In a supporting brief, the Williamses claimed that Crump did not pay the cash rent for the 2008 crop year. They further claimed that the parties’ termination of the lease also rendered the option void.

In his response to the Williamses’ motion for summary judgment, Crump pointed out that the Williamses ignored the June 2009 contract terminating the lease. He also argued that it was generally a factual question whether a condition precedent has been met or excused.

On January 18, 2019, Crump moved for summary judgment, seeking specific performance. He asserted that the purchase price was $255,000; that he was ready, willing, and able to purchase the property; that the Williamses failed to convey the property after he had exercised the option; and that he was entitled to specific performance because of the Williamses’ breach for failure to close. He also alleged that the contract terminating the leases provided that all of the provisions of the leases were null and void and unenforceable; that the contract did not mention the option; and that the option remained in full force and effect.

The Williamses responded to Crump's motion for summary judgment by arguing that the option was invalid and unenforceable because an option is merely a unilateral contract. They further argued that the option failed to satisfy the statute of frauds, and even if it did, it was unenforceable because it failed to include seven other terms they deemed essential. The Williamses also asserted that Crump's failure to comply with the option's special condition rendered the option unenforceable. The Williamses filed supporting affidavits stating that Crump had failed to pay rent for the 2008 crop year and...