Session Date July 10, 2014
Appeal from the Chancery Court for Johnson County No. 6168 John C. Rambo, Chancellor
George T. Wright, Mountain City, Tennessee, for the appellee, Sandra Kim Hammons.
H. Randolph Fallin, Mountain City, Tennessee, for the appellant, Carol Payne McKinnis.
Charles D. Susano, Jr., C.J., delivered the opinion of the Court, in which D. Michael Swiney and John W. McClarty, JJ., joined.
CHARLES D. SUSANO, JR., CHIEF JUDGE
In June 2008, Seller filed suit against Purchaser on an oral contract for the sale of real property. The complaint alleges the facts that follow. In early 2001, Seller entered into an oral agreement to sell a .68 acre piece of real estate located on Johnson Hollow Road in Mountain City to Purchaser and a Walker Frank South for a total consideration of $32, 000. The three parties agreed that there would be no down payment, and that the $32, 000 purchase price would be financed by Seller at 4% interest with payments of $240 per month. On April 24, 2001, the parties executed a deed reflecting the sale of the property from Seller to Purchaser and Mr. South; it was recorded the following day. The complaint further alleges that neither Seller nor Purchaser had the benefit of counsel in the transaction. In the years that followed, from the time the deed was executed to the date the complaint was filed, Purchaser made sporadic payments totaling $7, 193.83, to wit: $2, 928 in 2002; $654 in 2003; $600 in 2004; $2, 771.83 in 2005; and $240 in 2008. In 2003, Walker Frank South transferred all of his right, title, and interest in the property to Purchaser. According to the complaint, Seller made demands on Purchaser "to make the balance payments" and was advised by Purchaser that Purchaser "does not intend to pay anything further. . . ." The complaint sought a judgment in the amount of $26, 804, the amount remaining under the alleged agreement,  plus interest, and an equitable lien on the property.
In her answer, Purchaser admitted that she and Mr. South purchased the property from Seller in April 2001. Purchaser asserted that she and Mr. South did not execute any writings because it was, "as alleged[, ] an oral agreement for the sale of real estate." Purchaser specifically denied "that the parties had any agreement as towards [sic] the purchase price being $32, 000.00." Purchaser denied that Seller was without the assistance of counsel in the transaction; she notes that the deed was prepared by Attorney Lewis W. May, a reputable attorney in Mountain City, who is now deceased. Purchaser further denied the allegation that she made payments toward the alleged $32, 000 balance on the sale. Purchaser admitted that Mr. South conveyed his undivided interest in the property to her in 2003. Purchaser further stated that she no longer owns the property at issue; in April 2008, she conveyed the property to a Mary Sue Hanson, as evidenced by a recorded deed. Purchaser admits that Seller has told her that she owes her more money, but Purchaser denies that she owes Seller "anything further" or that Seller is entitled to the relief sought. In her defense, Purchaser asserted that the action was barred by both the statute of frauds and the statute of limitations.
In the "Statement of the Case" contained in her brief filed in August 2009, Seller reiterated that the sale of the property to Purchaser and Mr. South was based on an oral agreement. However, she attached to her statement a copy of an unsigned promissory note dated May 1, 2001, reflecting the terms of the transaction as alleged in her complaint. For her part, Purchaser's "Statement of the Case, " recites that "[t]here was no agreement regarding the purchase price, the payment of the purchase price, the deferment of the same, nor any interest rate therein." Purchaser further noted that although she and Mr. South purchased the property together and thus would each be responsible for one-half of any purchase price, Mr. South was not a party to the suit and had conveyed his interest in the property to her. In support of the statute of frauds defense, Purchaser asserted that "[n]o such paper writing [evidencing the parties'agreement] exists, nor has any paper writing been prepared and signed by [Purchaser]. . . ." In response, Seller amended the complaint to include Mr. South as a co-defendant. Purchaser's exhibits included a 2002 tax appraisal reflecting that the property was appraised at a total value of $5, 800 – $5, 900 for the land, and $100 in improvements thereon.
In October 2013, Purchaser filed a motion for summary judgment based on her affirmative defenses under the statute of frauds and statute of limitations. Regarding the former, Purchaser asserted that the parties' oral agreement regarding the sale of the property is not evidenced by a signed writing. She acknowledges the deed but points out that, on its face, it evidences that the transaction was fully performed. In her supporting affidavit, Purchaser stated that in 2001, Seller "was anxious to get the property out of her name" because she was afraid that friends of her deceased husband might sue her for work they might have done on the property. Because her late husband was fond of Purchaser and Mr. South, Seller offered the property to them. Purchaser further stated, in relevant part:
[A]t no point in time during this process was there ever a purchase price agreed upon or asked by [Seller]. I asked her on more than one occasion to have a Promissory Note and Deed of Trust draw up to set forth the terms and she indicated that she did not wish to have anything in her name which creditors of her deceased husband might attempt to levy upon. After recording the deed . . ., I . . . with some limited assistance from Walker Frank South made improvements to the property to the point where it became livable approximately a year later. I acknowledge from the date of the execution of the deed, I made sporadic payments at different times and in different amounts due to the circumstance that Walker Frank South would not contribute either any money towards this or any material improvements.
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I have paid [Seller] nothing since the year of 2005. I feel I have fully paid for this property and certainly have paid the appraised value as indicated by ...