IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
October 3, 2012 Session
ELIZABETH C. WRIGHT v. FREDERICO A. DIXON, III
Appeal from the Chancery Court for Knox County
No. 173056-3 Michael W. Moyers, Chancellor
No. E2012-00542-COA-R3-CV-FILED-NOVEMBER 29, 2012
Elizabeth C. Wright (“the Seller”) filed suit against Frederico A. Dixon, III (“the Buyer”) for
breach of a contract to purchase real property. The contract allowed the Buyer to terminate
in the event he was unable to obtain financing. Under the contract, termination was to be
effective only if notice of same was “received.” The Buyer claims to have sent a notice of
termination through his agent by fax to the Seller. The Seller claims that she did not receive
it. The trial court found that the attempted termination was ineffective because it was not
received. The Buyer appeals. We affirm.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
Affirmed; Case Remanded
C HARLES D. S USANO, J R., J., delivered the opinion of the Court, in which D. M ICHAEL
S WINEY and J OHN W. M CC LARTY, JJ., joined.
James B. Johnson, Nashville, Tennessee, for the appellant, Frederico A. Dixon, III.
Lewis S. Howard, Jr., and Elizabeth D. Sherrod, Knoxville, Tennessee, for the appellee,
Elizabeth C. Wright.
OPINION
I.
A.
At the heart of this dispute is a “Purchase and Sale Agreement” (“the Agreement’) for
the purchase and sale of real property located at 9140 Grey Point Drive, Knoxville. The
purchase price is $875,000. The Buyer deposited earnest money of $20,000. The terms of
the Agreement that are pertinent to this appeal are as follows:
This Agreement is conditioned upon Buyer’s ability to obtain a
loan(s) in the principal amount of 100% of the purchase price
listed above . . . . In the event Buyer, having acted in good faith
and in accordance with the terms below, is unable to obtain
financing, Buyer may terminate this [A]greement by providing
written notice and a copy of Lender’s loan denial letter. Upon
termination, Buyer is entitled to a refund of the Earnest Money.
....
* * *
Should Buyer default hereunder, the Earnest Money shall be
forfeited as damages to the Seller, and Seller may sue, in
contract or tort, for additional damages or specific performance
of the Agreement, or both. . . . In the event that any party hereto
shall file suit for breach or enforcement of this Agreement . . .,
the prevailing party shall be entitled to recover all costs of such
enforcement, including reasonable attorney’s fees.
* * *
Time is of the essence of this Agreement.
* * *
Except as otherwise provided herein, all notices and demands
required or permitted hereunder shall be in writing and delivered
either (1) in person, (2) by a prepaid overnight delivery service,
(3) by facsimile transmission (FAX), (4) by the United States
Postal Service, postage prepaid, registered or certified return
receipt requested or (5) Email. NOTICE shall be deemed to
have been given as of the date and time it is actually received.
Receipt of notice by the real estate licensee or their Broker
assisting a party as a client or customer shall be deemed to be
notice to that party for all purposes under this Agreement, as
may be amended, unless otherwise provided in writing.
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(Capitalization in original; emphasis added; paragraph numbering and headings in original
omitted.)
The closing date was extended by agreement of the parties to June 27, 2008, which
was a Friday. The Seller was out of town on a family vacation on that date. She appointed
Jill Sutton as her attorney in fact to handle the closing. After the Buyer failed to close, the
Seller sold the property for a price less than the sale price under the Agreement and filed this
action for damages. The case went to trial before the court sitting without a jury. After the
first trial, the court found that the Buyer had failed to make reasonable efforts to obtain
financing and entered a judgment in favor of the Seller awarding damages and attorney’s
fees. The Buyer appealed the judgment and we reversed, holding “that the evidence
preponderates against the Trial Judge’s finding that the [Buyer] failed to put forth reasonable
efforts to obtain a loan . . . .” Wright v. Dixon, No. E2010-01647-COA-R3-CV, 2011 WL
1648088 (Tenn. Ct. App. E.S., filed May 2, 2011). We remanded “for [a] determination
whether the [Agreement] was properly terminated, a question which the Trial Court
pretermitted.” Id.
On remand, the parties and the court focused on whether the Seller received written
notice of termination. The Seller testified that she did not receive a one-page fax dated June
27, 2008 (“the Alleged Fax”), which the Buyer’s agent, Patricia Grissom (“the Agent”),
claimed to have sent to the Seller’s office fax machine. The Alleged Fax contains a
handwritten note stating:
Elizabeth, The Dixons’ are withdrawing from the . . . Agreement
due to their financing falling through. Please see the Denial
letter attached from SunTrust.
The Seller testified that, when she is absent from the office, faxes received during normal
business hours are placed by administrative help in her physical office mailbox. Faxes
received after office hours “would be sitting on the fax machine.” The Seller did not arrive
back in Knoxville from her family vacation until late Friday night. The Seller waited until
early Saturday morning, June 28, to go to the office. There was no fax from the Agent either
in her office mailbox or on the fax machine. On July 2, 2008, the Seller did receive a copy
of the denial of credit document under a fax cover sheet misdated July 1, 2008. The Seller
testified that the first time she saw the Alleged Fax was after the first trial.
The Agent testified that she called the Seller on June 27 and informed her that the
Buyer had not been able to obtain financing and that he was terminating the Agreement. She
also asked her assistant, Tessa Moore, to send the Seller a fax dated June 27, 2008, as well
as the letter from SunTrust denying financing. The Agent’s “personal” file contained the
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Alleged Fax, with a handwritten confirmation by Tessa Moore that it was sent. The Agent
testified that, when the Seller said that she did not receive the Alleged Fax she resent the
denial of financing document on either July 1 or July 2. On cross-examination the Agent
admitted that she had received a subpoena to appear at the first trial and bring with her all
documents pertaining to the termination. The documents she produced at the first trial did
not include the Alleged Fax. The Agent testified that she met with the Buyer’s attorney
before trial and gave him the office file. According to the Agent, it was after the first trial
that she searched her personal files and found the Alleged Fax. The Agent testified that it
was after the first trial that she realized the Seller was claiming that she did not receive the
Alleged Fax. This prompted her to search her personal files.
Tessa Moore testified by deposition. In June of 2008, she worked for the Agent. Her
duties were varied and included sending faxes. The fax machine that she would have used
was “the one that was for the agents to use . . . in the room with the copier and all that kind
of stuff.” Moore testified that the fax machine in the copy room was a combination “scanner,
copier, printer, all that fun stuff.” The procedure that she followed to verify that faxes were
correctly sent was,
it would print out a submission report that it went through or
didn’t go through and if I had that then I would attach it to the
fax cover sheet and stamp it faxed and date and time so . . . I
knew that it was done so at a quick glance I could see that I’d
faxed it. If I didn’t get the submission report it would still come
up on the LCD screen that it was sent successfully. And once
that happened I would hit okay and I would stamp the thing
faxed and put it in the file. And if I didn’t get any kind of report
I would call to make sure that they got it or resend it.
Moore was asked why confirmation reports from the machine are not always secured. She
explained:
Sometimes . . . , with multiple agents not everybody knows how
to keep paper in it or know how to use the machine properly and
they don’t always work. So . . . there’s not always going to be
a printout. People go in a[nd] adjust settings and it will print out
on the one thing and everybody just throws away the one report
that shows the last 50 things that went through.
Moore was asked to elaborate on her prior testimony about the LCD screen. She testified:
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I would read it. If it said submission successful then I would . . .
stamp it and go [on] to my next thing. If I felt that it didn’t take
all the pages then I would resend it or I would call and [ask] did
you get it? . . . so, that’s how I handled things.
In a situation where she did not receive a transmission confirmation from the machine, but
did receive a confirmation on the LCD screen, she would rubber stamp the document “faxed”
and write in the date, time and her initials. Moore testified on cross-examination that even
if the machine-generated confirmation had been discarded, the information would, to her
knowledge, be stored in the fax machine.
Moore was shown the Alleged Fax. She identified some of the handwriting on the
stamped document as her own. The document contained the stamp she described indicating
that it had been sent by fax. In the vicinity of the stamp, she had written the date, the time,
and her initials. Moore testified that she would not have stamped the document if she had
not gotten confirmation from the LCD screen that the document had been successfully
transmitted.
B.
After hearing the proof, the court announced its findings from the bench. Its findings,
in pertinent part are as follows:
[T]his contract literally says that notice is to be deemed received
or given when it is actually received, and it has to be given by
one of the means that is provided for in the contract . . . as a
written form of notice. I don’t know if we had a glitch. I don’t
know what happened, but [the Seller] has testified that she did
not receive this notice on the 27th, and the Court finds her
testimony to be credible. I believe she did not receive it. I don’t
know why she didn’t receive it, but she didn’t receive it . . . . I
agree with [counsel for the Seller] that by the 27th, which was
the date of the closing, either the closing had to go forward or
the [B]uyer had to comply with the requirements of the contract
in order to terminate the contract, and for reasons the Court
can’t fathom, that wasn’t done. I think [counsel] is correct, this
is a million dollar real estate contract, there’s a whole lot of
money on the line. . . . [I]t’s inconceivable to me that with the
means to prove that such a fax had been sent on the 27th, such
as printing out the last 50 faxes that had been sent from [the
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Agent’s] machine or printing out the transaction log from the
machine, with that much money on the line, it’s inconceivable
that it wouldn’t have been done. . . . [S]o I don’t even know if
that would make a difference. Because . . . the most recent
instruction from the Court of Appeals, is that this Court is to
literally construe contracts as they are written, the Court does
not believe that the means provided under the contract for
withdrawing from the contract upon failure to receive financing
have been literally complied with. There’s no evidence that on
the 27th, prior to the time set for the closing, that the [S]eller or
her agent had received written notice of a declination of
financing and of a choice to withdraw from the contract. . . .
[A]lthough this Court doesn’t like it very much, the Court is
going to find, again, that [the Buyer] was in breach.
The court entered a judgment against the Buyer awarding damages of $36,541.55 and
attorney’s fees of $43,280.76. The Buyer filed a timely notice of appeal.
II.
The issues on appeal, paraphrased, are:
Whether the evidence preponderates against the finding that the
Seller did not receive the fax termination documentation.
Whether the Seller waived the “time is of the essence” clause in
the agreement by not being in the office to retrieve the fax on
the scheduled closing date.
III.
In cases tried by the court without a jury, we review the trial court’s findings of fact
de novo with a presumption that the findings are correct unless the evidence preponderates
to the contrary. Tenn. R. App. P. 13 (d); Blair v. Brownson, 197 S.W.3d 681, 684 (Tenn.
2006). Determinations of law are reviewed de novo with no presumption of correctness.
Whaley v. Perkins, 197 S.W.3d 665, 670 (Tenn. 2006).
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IV.
The Buyer argues that the evidence preponderates against the court’s finding that the
Seller did not receive the Alleged Fax because Moore’s testimony of seeing confirmation of
transmission on the LCD screen “was undisputed by [the Seller],” and, “[t]herefore,
according to Ms. Moore’s undisputed testimony the documents were ‘actually received’ by
the recipient fax machine.” The error of this argument is easily shown by looking at its
converse from the perspective of the Seller’s “undisputed” testimony that she did not receive
the fax. The Buyer’s argument rests on the premise that because Moore testified that she sent
the fax, it must have been received. The converse of the Buyer’s argument is that if the
document was not received, it must not have been sent. The Seller testified that if a fax had
been received, it would have been either on the office fax machine or in her office mailbox.
Upon her arrival at her office on Saturday morning, she checked both places and there was
no fax. The trial court specifically commented on the credibility of the Seller. The court
found her credible. The trial court’s determination of credibility is given great weight and
will not be reversed absent “clear, concrete and convincing evidence” to the contrary.
Tennessee Valley Kaolin Corp. v. Perry, 526 S.W.2d 488, 490 (Tenn. Ct. App. 1974); see
also Wells v. Tennessee Bd. of Regents, 9 S.W.3d 779, 783 (Tenn. 1999).
Arguably, had Ms. Moore been able to supply a confirmation record printed by the
sending machine showing that it read the correct number of pages and transmitted that data
to the number assigned to the receiving machine, we would at least have a basis for
questioning the trial court’s acceptance of the Seller’s testimony. We agree with the trial
court that, in a transaction involving a million dollar piece of property, it is “inconceivable”
that if the fax had truly gone through, the Agent would not have provided the machine
printed confirmation of transmission.1 We also note that, even though the court did not
specifically comment on the fact that the Agent only produced the Alleged Fax sometime
after the first trial, that circumstance casts some doubt on the Agent’s office record keeping.
Ms. Moore did not testify that she specifically remembered sending the document. Rather,
she was shown the Alleged Fax and described what her normal office procedures would have
been with regard to the stamp, and her handwritten notations. We have considered the
1
This court accepts certain filings by facsimile. Tenn. R. App. P. 20A(b)(4). However, the “sender
bears the risk of using facsimile transmission to convey a document . . . including, without limitation,
malfunction of facsimile equipment, whether the sender’s or the [court’s] equipment; electrical power
outages; incorrectly dialed telephone numbers; or receipt of a busy signal from the [court’s] facsimile
telephone number.” Id. (c)(3). If, and only if, the sender can provide “the document printed by the sending
facsimile machine stating the telephone number of the receiving machine, the number of pages sent, the
transmission time and date, and an indication of any errors in transmission” the court can accept an original
document for filing as if it had been received. Id. (a)(5) and (c)(3).
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record as a whole and hold that the evidence does not preponderate against the trial court’s
finding that the termination document was not received on the closing date.
The Buyer argues that the Seller waived the “time is of the essence” clause by not
being at the fax machine to retrieve the Alleged Fax. Presumably, this argument would give
rise to a finding of termination by and through the fax sent later on July 2, 2008. We find no
merit to the Buyer’s argument. It is founded entirely on the faulty argument that the Alleged
Fax arrived at the Seller’s machine because Ms. Moore sent it, therefore the Seller would
have received the fax if she had only been in the office. We have already rejected the
argument that the evidence preponderates against the finding that the Seller did not receive
the Alleged Fax. In the absence of a finding that the Alleged Fax arrived at the machine, we
see no merit to the argument that the Seller waived anything by not being available in the
office when the Alleged Fax arrived.
V.
The judgment of the trial court is affirmed. Costs on appeal are taxed to the appellant,
Frederico A. Dixon, III. This case is remanded, pursuant to applicable law, for enforcement
of the judgment and the collection of costs assessed by the trial court.
_______________________________
CHARLES D. SUSANO, JR., JUDGE
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