Jackson v. Crump

2022 Ark. App. 136

643 S.W.3d 788

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

v.Ronnie CRUMP, Appellee

No. CV-19-660

Court of Appeals of Arkansas, DIVISION III.

Opinion Delivered March 30, 2022

Rehearing Denied May 04, 2022

Parker Hurst & Burnett PLC, by: Donald L. Parker II, Jonesboro 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. 137, 643 S.W.3d 781 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. They also argue other different points in each case. We affirm.

I. Background

In March 2006, the Williamses purchased a 320-acre tract of farmland from Lillian Crump. The Williamses were to pay $640,000 at the time of execution of the contract of sale and an additional $160,000 no later than ten years after the closing of the sale. The Williamses granted a second mortgage in favor of Ms. Crump to secure payment of the $160,000.² The warranty deed for the sale was recorded on March 24, 2006. As additional consideration for the sale, Ms. Crump required that the Williamses execute a lease to her son, Ronnie Crump, for the property. She also required the Williamses to grant Crump an option to purchase the property.

The purpose of the option was to allow Crump to keep the property in the family if he chose to do so. The option provided as follows:

1. 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 TODD WILLIAMS and not later than 30 days after that date.^[3] This Option is to be considered personal to Optionee and his rights under this agreement may not be assigned to any other party.

2. Exercise of Option. If on or before midnight of notification date, the Grantee shall notify Grantors of Grantee's election to exercise the option hereby granted by ordinary mail, postmarked prior to the deadline indicated and addressed to Grantors ..., a contract shall thereupon result in which the Grantor agrees to sell and Grantee agrees to purchase the above-described property for the price, on the terms and subject to the conditions herein set forth. In the event that notice in accordance with the terms hereof of the election by the Grantee to exercise the option herein granted is not given within the time indicated, this option shall at once cease and terminate and the Grantee shall have no further rights hereunder.

2[sic]. Purchase Price. The purchase price of the above-described property is SIX HUNDRED, FORTY THOUSAND DOLLARS or the total amount paid by TOMMY and TODD WILLIAMS to LILLIAN CRUMP or her heirs or successors which has been paid at the time of the exercise of this option, whichever amount is greater.

[4]. Title Documents. Upon the exercise of this option within the specified time by the Grantee, the Grantor shall provide to the Grantee 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, the Grantor, the Grantor [sic] shall have a reasonable time within which to cure the same. In the event the Grantee 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 Grantor within a reasonable time, the Grantee 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 Grantor(s) to deliver merchantable title.

[5]. Closing. On the closing date, the Grantor shall make, execute and deliver to the grantee 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 the Grantee to the Grantor.

Lillian Crump died in December 2010.

On March 28, 2016, Crump notified the Williamses of his exercise of the option. The Williamses responded through counsel with some questions concerning the identity of Lillian Crump's heirs, the Williamses’ final payment for the purchase of the property, and Crump's financial ability to perform. A closing never occurred.

II. The Litigation

Crump filed suit on December 8, 2016, for specific performance to require the Williamses to convey the property to him. The Williamses answered, denying the material allegations and asserting that it was impossible to convey clear title as originally agreed. The Williamses also pled the statute of frauds as an affirmative defense.

The two companion 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 in both cases. 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 January 18, 2019, Crump moved for summary judgment seeking specific performance. He asserted that the purchase price was $640,000; that he was ready, willing, and able to purchase the property; that the Williamses failed to convey the property after he had provided notice of the exercise of the option; and that he was entitled to specific performance because of the Williamses’ breach for failure to close.

The Williamses responded to the 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. Attached to the response was a letter from their attorney to Crump's attorney asking for an approval letter for the amount of $640,000 from Crump's lender.

On March 12, 2019, a hearing was held on the motions for summary judgment in both cases. At the conclusion of the hearing, the court ruled from the bench and granted Crump's motion for summary judgment. The court found that Crump had properly and timely exercised his option, and, when he did so, a contract of sale was formed. The court further found that the option did not violate the statute of frauds because the option contained the essential and necessary terms and conditions of the sale. The court also found that the questions raised by the Williamses were either covered in the option or were immaterial. The Williamses were ordered to provide Crump with a commitment of title insurance within fifteen days and to make, execute, and deliver a warranty deed at a mutually agreeable closing date within fifteen days of providing the title insurance commitment. All other issues, including consequential damages, were reserved. The court's order memorializing its bench ruling was entered on March 20, 2019.

The Williamses delivered the title commitment on April 2, 2019.

On April 8, the Williamses filed a motion seeking an Arkansas Rule of Civil Procedure 54(b) certificate from the circuit court because the order on summary judgment was not final due to the reserved issues.

On April 12, the court held a hearing on the Williamses’ motions for a Rule 54(b) certificate and to stay the proceedings. By order entered on May 6, the court denied the motions. The court found that granting a Rule 54(b) certificate would actually lead to further delay and result in piecemeal litigation. By separate order entered the same day, the court amended its order granting summary judgment in certain respects. First, the court adopted the legal description contained in the option. The court found that the purchase price was $640,000 and that there was no good-faith basis for the Williamses to argue otherwise because they did not dispute that figure in the response to Crump's motion for summary judgment.

On May 9, the court entered a judgment awarding Crump the sum of $180,000 ($90,000 each year for the years 2017 and 2018) as consequential damages jointly and severally against the Williamses. Crump was allowed fourteen days to file his motion for attorney's fees. Finally, the court held that the judgment awarding damages resolved the last issue left outstanding in the order awarding summary judgment as amended.⁴ This appeal followed.

III. Issues on Appeal

The Williamses argues that the circuit court erred in (1) manufacturing immaterial terms to facilitate Crump's closing of the option because the burden of closing the option with any unnegotiated "immaterial terms" was on Crump; (2) considering extrinsic evidence in determining that the purchase...