Moody Realty Company, Inc. v. Ronald L. Huestis ( 2007 )

IN THE COURT OF APPEALS OF TENNESSEE
AT JACKSON
November 29, 2006 Session
MOODY REALTY COMPANY, INC. v. RONALD L. HUESTIS, ET AL.
Direct Appeal from the Chancery Court for Weakley County
No. 18,992 William B. Acree, Chancellor
No. W2006-00905-COA-R3-CV - Filed April 4, 2007
This is a breach of contract action for the recovery of a real estate brokerage commission. The trial
court found that the parties did not enter into a binding buyer’s representation agreement because
there was no meeting of the minds. Instead, the court awarded the plaintiff real estate broker
damages in quantum meruit. On appeal, we find that the parties mutually assented to the terms of
the buyer’s representation agreement and that the broker was entitled to its commission as stated in
the contract. We vacate the award of damages in quantum meruit, affirm in part, reverse in part, and
remand for entry of judgment in accordance with the contract.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed in part;
Reversed in part; Vacated in part; and Remanded
DAVID R. FARMER , J., delivered the opinion of the court, in which ALAN E. HIGHERS, J., and HOLLY
M. KIRBY , J., joined.
Jeffery T. Washburn, Dresden, Tennessee, for the appellants, Ronald L. Huestis and Lisa M. Huestis.
William R. Neese, Dresden, Tennessee, for the appellee, Moody Realty Company, Inc.
OPINION
In this action to recover a real estate brokerage commission, Moody Realty Company, Inc.
(Moody Realty) alleged that Ronald and Lisa Huestis (Mr. Huestis, Mrs. Huestis, or the Huestises)
breached the buyer representation agreement when they refused to pay the commission for their
purchase of a dairy farm specifically listed in the agreement. After telling Moody Realty agents they
were not interested in the farm, they proceeded to negotiate directly with the seller and to purchase
it without Moody Realty’s involvement. The dispositive issue on appeal involves the question of
contract formation. Specifically, the Huestises contend they were not bound by the buyer
representation agreement because there was no meeting of the minds. To support this argument, they
rely upon the absence of Mrs. Huestis’s signature, Moody Realty’s alleged refusal to sign the
contract in Mr. Huestis’s presence, the alteration of the contract termination date, and Moody
Realty’s alleged failure to provide the Huestises with a copy of the contract. The trial court found
there was no meeting of the minds and therefore no contract, but it awarded $20,000 in quantum
meruit to Moody Realty. On appeal, the Huestises raise the issue of whether the lower court erred
in awarding damages in quantum meruit when no proof was offered at trial regarding the reasonable
value of the agents’ services. Moody Realty raises the additional issue of whether the lower court
erred by finding an absence of contract between the parties. We believe the evidence in the record
preponderates against the trial court’s finding. There was a meeting of the minds, and thus a binding
contract, between the parties. We vacate the award of damages in quantum meruit, affirm in part,
reverse in part, and remand for entry of judgment in accordance with the contract.
Facts and Procedural History
In July of 2004, the Huestises sought the assistance of Moody Realty in locating a dairy farm
to purchase in Tennessee. In late July of 2004, they drove to Paris, Tennessee from their home in
Vermont and met with associate broker William Fuchs (Mr. Fuchs) and broker James Oliver (Mr.
Oliver), both employees of Moody Realty, to view available farm properties. Mr. Fuchs first showed
Mr. Huestis one of their listed properties, the Arnold farm. Then, Mr. Fuchs and Mr. Oliver (the
agents) drove the Huestises by the Arnold farm again and proceeded to show them two other farms,
the Leach farm and the Hazelton farm, that were not listed by Moody Realty. The Hazelton farm
was not listed by anyone at the time of the Huestises’ visit, but the agents knew the owners of the
Hazelton farm would entertain offers to purchase the property.
On that day, the agents presented a standard, two-page Buyer’s Representation Agreement
(“buyer’s representation agreement” or “agreement”) provided by the Tennessee Association of
Realtors to the Huestises. The first page identifies “Ron Huestis and wife” as the client employing
Moody Realty as a non-exclusive agent to locate property for purchase and to advocate on their
behalf during any negotiations. The agreement also provides that it is effective from the date of
execution until “1-1-06" or until the closing if it occurs before that date. Moody Realty agents had
written the termination date of “1-1-06” in the blank supplied. Under the section listing the client’s
obligations, paragraph two (2) states that the client
authorize[s] Broker to negotiate for a fee paid by the Seller and/or the Seller’s agent,
the payment of which will be fully disclosed to Client. If a fee is not offered or paid
to Broker, as could occur, for example, in the purchase of an unlisted property, Client
agrees to pay Broker a total of . . . 8% compensation based on the total sales price.
. . . Broker’s fee is earned at the signing by both parties of an agreement to purchase
any property(ies) as described above through the efforts of Broker and is due at the
closing of any such transaction.
On the first page, the agreement specifically exempts the “Wilford Duncan” property and,
on the second page, specifically includes the Hazelton and Leach farms in the space provided for
other terms and conditions. This section, also penned by Moody Realty agents, provides as follows:
-2-
“This agreement valid on Ron Huestis and is valid for David Leach and Richard Hazleton [sic] dairy
farms.”
It is undisputed that Mr. Huestis signed the agreement and that Mrs. Huestis did not. Moody
Realty offered the original page two (2) into evidence, bearing the signatures of Mr. Huestis, Mr.
Fuchs, and Mr. Oliver. At the time it filed suit, Moody Realty could not locate the first page of the
agreement but obtained it from attorney Max Speight (Mr. Speight), who had earlier obtained it from
the Huestises.1 Excluding Mr. Speight’s notations in the margin (which are irrelevant to this case),
both parties authenticated the copy of the first page. All appear to agree that the agents discussed
the buyer representation agreement while they were en route from the Arnold property to the Leach
farm. And, with the exception of the termination date dispute, the Huestises testified to knowing and
understanding the terms of the agreement, which included an eight percent (8%) commission on the
sales price of the Hazelton or Leach farm if purchased.
The parties vigorously dispute when the agents signed the agreement and what they provided
to Mr. Huestis to evidence the contract. There is no dispute that Mr. Huestis received a copy of the
written contract, including the terms penned by Moody Realty, but little in the record clarifies
whether Mr. Huestis received a partially or fully executed copy in addition to a completely blank
one. First, Mr. Fuchs and Mr. Oliver testified that they both signed the agreement in the presence
of Mr. Huestis and that Mr. Fuchs copied the agreement for the Huestises in the Moody Realty office
at the end of that day. Yet, their testimony fails to account for the Huestises’ possession of partially
executed and/or blank copies of the agreement including the handwritten terms.
Unfortunately, the Huestises’ testimony brought no clarity to the matter. Mr. Huestis testified
that the agents did not sign the agreement in his presence. Alongside these assertions, however, Mr.
Huestis made ambiguous statements that clouded his version of events. When recounting his trip to
the Moody Realty office at the end of the day, Mr. Huestis stated that he entered the office, got a
copy of a contract without a signature, and asked for Mr. Fuchs’ signature on it. He continued: “so
I figured it would be valid with his signature on it, I put my signature on it after because I assumed
my wife had already signed it.” This statement seems to suggest that Mr. Huestis and Mr. Fuchs
executed an agreement at that time, but then Mr. Huestis testified that he had signed the first contract
earlier that day but never saw them sign it. He returned to the office for a second copy and “all I got
was a blank copy with no signatures on it, not even mine.” Interestingly, Mr. Huestis’s attorney
could not sort these facts out for the court when asked.
Mrs. Huestis stated that she never saw the agents sign the agreement. Then she gave
conflicting testimony about the copies Mr. Huestis received at the end of the day. In her deposition,
she stated that he returned from the Moody Realty office with two copies: one blank and one bearing
his signature. Then at trial, she stated that she viewed the contract when her husband returned to the
1
W hen the Huestises were considering M r. Hazelton’s proposal in late 2004, they contacted Mr. Speight to
determine whether the buyer’s representation agreement was binding on them. They transmitted a copy of an unsigned
contract to Mr. Speight by facsimile and requested that he render an opinion as to its efficacy.
-3-
car and that it lacked signatures. She recalled her husband saying that he did not have a copy of the
contract, that Moody wouldn’t sign it, but that he would like a signed copy. When presented with
her conflicting deposition testimony, Mrs. Huestis stated that she had been mistaken because she
actually relied on what Mr. Huestis said to her rather than viewing the document itself.
We find similar patterns with respect to the termination date dispute. The Huestises contend
that the agents changed the termination date twice in the course of the day. According to the
Huestises, the agents first changed the date from a six month term to a termination date of January
1, 2005, and discussed the change with both Mr. and Mrs. Huestis. They contend that the agents
then changed the date to January 1, 2006, while Mr. Huestis was not present. From most accounts,
it appears that the termination date of “1-1-06" was on the agreement when Mr. Huestis signed it.
Although Mr. Huestis stated at trial that he was not certain if it was there, Mrs. Huestis and Mr.
Fuchs testified to its presence at the time of execution. The Huestises also contend that at the time
Mr. Huestis signed the agreement, he thought the contract terminated in 2005. Mrs. Huestis stated
at trial that she was present in the car when the agents changed the date to 2006 and that, although
they handed her the document and told her of the change, she placed it on the seat and never signed
it. Yet, Mrs. Huestis testified differently at her deposition and stated that when her husband returned
to the car, Mr. Fuchs told him about the contract, the termination date of 2006, and asked him to sign
it. Mr. Huestis then signed it.
Immediately after the showing and at all times thereafter, the couple told the agents that they
had no interest in the Hazelton farm. At trial, Mr. Huestis testified that the farm was out of their
price range, as the Multiple Listing Service (MLS) information sheet2 revealed a purchase price of
$468,000. Mr. Huestis also stated that he questioned how old the MLS listing information was, but
that the agents did not respond to him. Although assuming the sheet to be more than a year old, he
apparently never pursued the issue of current pricing or engaged in discussions with the agents about
how flexible Mr. Hazelton might be in negotiating the price. The agents, on the other hand, testified
that they told Mr. Huestis that Mr. Hazelton would take no less than $400,000 for the farm. Mr.
Huestis contended that he learned of this price only from Mr. Hazelton in December of 2004, just
prior to their oral purchase agreement.
Mr. Fuchs called the Huestises no less than three (3) times after their visit to determine if they
wanted to pursue any of the three farms further. Each time, the Huestises unequivocally stated they
were not interested. According to Mr. Huestis, around Thanksgiving of 2004, Mr. Hazelton
contacted him to inquire into his interest in seeing the farm again. Mr. Huestis agreed to take another
look because he planned to be in the area for other reasons. Mr. Huestis apparently never contacted
Moody Realty or notified them that he would be returning to the area and visiting the Hazelton Farm
again. During the visit, Mr. Hazelton quoted a $475,000 asking price. They later communicated by
2
The parties dispute whether the agents even provided the MLS sheet to the Huestises. Mr. Fuchs and Mr.
Oliver contend they never provided one, and the Huestises contend Mr. Oliver handed it to them while traveling to the
farms. The Huestises offered another M LS sheet at trial that showed the most recent asking price for the farm to be
$325,000 rather than $468,000. The MLS sheet reflected that the Hazelton farm was offered at this lower price as recent
as fourteen months before they viewed the property.
-4-
telephone in the first week of December, and Mr. Huestis told Mr. Hazelton they were not interested
in the farm because of the pricing. Mr. Hazelton then lowered the price to $400,000, and Mr.
Huestis accepted the offer. They reached an agreement that day for the Huestises to purchase the
farm for that amount,3 and they consummated the transaction in January of 2005. Mr. Hazelton and
his co-owner executed a warranty deed on January 20, 2005, and recorded the transfer of title to Mr.
and Mrs. Huestis four days later.
As we noted previously, prior to entering this agreement and consummating it, Mr. Huestis
contacted attorney Max Speight to determine if the buyer representation agreement was binding. He
then transmitted copies of an unsigned contract by facsimile4 to Mr. Speight and understood his
opinion to be that there was no contract because nobody signed the agreement.
Mr. Fuchs learned of the pending transaction from Mr. Hazelton and contacted the Huestises
in the first week of December 2004. He testified to calling the Huestises several times and insisting
on the eight percent (8%) commission stated in the contract. Mr. Huestis refused to pay Moody
Realty the commission and contended that there was no binding contract between them.
Moody Realty filed a complaint against the Huestises on March 10, 2005, and alleged breach
of contract and violation of the Tennessee Consumer Protection Act (TCPA).5 It demanded thirty
two thousand dollars ($32,000),6 pre-judgment and post-judgment interest, treble damages, and
attorney’s fees. The Huestises filed an answer and later amended it with the court’s permission.
They denied the existence of a binding contract and, as an alternative affirmative defense, contended
their performance was excused because of Moody Realty’s breach of contract and of fiduciary duty.
The Huestises alleged that the agents failed to inform them of all available information on the
property, including the most recent asking price of $325,000, and that this failure constituted a
breach of fiduciary duty. These omissions also constituted a breach of contract, thus excusing the
Huestises’ obligation to perform and pay the commission. Moreover, they asserted that because Mrs.
Huestis never executed the agreement, she was not bound in any event. They moved the court to
dismiss the complaint in its entirety for these reasons. The Huestises also filed a counter-complaint
with their amended answer. In it, they identified various undisclosed facts and information and
asserted claims for breach of contract, breach of fiduciary duty, and violation of the TCPA. The
counter-complaint did not list the money damages sought but instead requested “judgment . . . for
such sum that the court finds just and appropriate under the circumstances along with pre-judgment
3
Mr. Huestis testified that, although they had reached an agreement regarding his purchase of the farm for
$400,000, their negotiations regarding the sale of equipment continued.
4
Exhibit 2 reveals that the Huestises provided to M r. Speight a copy of the agreement with no signatures
whatsoever, but the record is unclear as to whether he understood that Mr. Huestis had signed the form.
5
W e note that Moody Realty never included the remedy of quantum meruit in its complaint.
6
This figure is the equivalent of an eight percent (8%) commission on a four hundred thousand dollar
($400,000) sales price.
-5-
and post-judgment interest,” treble damages, attorney’s fees and expenses, and the dismissal of
Moody Realty’s complaint.
After Moody Realty filed its answer to the counter-complaint, the Huestises filed a motion
to dismiss the TCPA claim for failure to state a claim upon which relief may be granted, along with
a memorandum of law and with excerpts from Mr. Fuchs’ deposition. The parties appeared before
the chancellor, who decided not to rule on the motion. Then, on March 10, 2006, Circuit Judge
William Acree, sitting by interchange, effectively dismissed the Huestises’ motion and then presided
over the two-day trial.
At the conclusion of the proof, Judge Acree discussed the issue of contract formation as
follows.
The question of whether or not there was a contract between the parties, the
Court finds that there was not a meeting of the minds in this case for several reasons.
First of all the contract was signed by - - in a haphazard manner. It was
signed - - there [were] changes made. It was signed in a car rather than a business
office as one would expect. There were kids, small children involved present.
The parties never did sit down and say, look, here’s what we’re agreeing to
and explain all that. It was not presented in that manner as you would normally
expect a contract to be signed.
Mrs. Huestis did not sign the contract. It was handed to her, and she just laid
it down and didn’t sign it, and I don’t understand why if the parties did agree upon
the contract why she wasn’t questioned about this, Mrs. Huestis, you’re going to sign
this or you’re not going to sign it or what is the situation.
And, finally, there was no complete copy of the contract kept. I know that
was not - - I understand that copies can be acceptable in evidence, but taking this
circumstance in with the others; that is, that nobody bothered to keep a complete
copy of the contract leads the Court to conclude that there was no meeting of the
minds and no contract.
In a decree entered on March 29, 2006, Judge Acree dismissed both Tennessee Consumer
Protection Act claims and ruled, in pertinent part, as follows:
3. Defendants’ counterclaim is denied and dismissed with prejudice in its entirety.
4. Plaintiff’s cause of action for breach of contract is denied and dismissed with
prejudice.
-6-
5. Plaintiff is granted judgment against Defendants, jointly and severally, in the
amount of twenty thousand dollars ($20,000) for services provided
Defendants, quantum meruit.
The Huestises then timely filed their notice of appeal.
Issues Presented and Standard of Review
The parties collectively present two issues, restated below, for this Court to address. The
Huestises raise the following issue:
(1) Whether the Chancery Court of Weakley County, Tennessee, erred in
awarding the plaintiff $20,000 for services, quantum meruit, after ruling that a real
estate agency’s Buyer’s Representation Agreement was not a valid contract and in
view of the fact that the plaintiff failed to present any evidence during the trial
relative to the reasonable value of the goods or services provided to the defendants.
Moody Realty, on the other hand, presents the following issue:
(2) Whether the trial court erred in denying and dismissing Moody
Realty’s claim for breach of contract.7
Our analysis begins and ends with the issue of contract formation. Our holding that the
parties did enter into a binding contract thus obviates the need to address the remedy of damages in
quantum meruit.
In a nonjury trial, our standard of review is de novo on the record. Wright v. City of
Knoxville, 898 S.W.2d 177, 181 (Tenn. 1995). We apply a presumption that the trial court’s findings
of fact are correct and will reverse the court below only if the preponderance of the evidence is
otherwise. Tenn. R. App. P. 13(d). We do not apply that presumption, however, to the trial court’s
conclusions of law. Bowden v. Ward, 27 S.W.3d 913, 916 (Tenn. 2000).
Analysis
In light of the trial court’s finding that there was no meeting of the minds and therefore no
contract, we begin with Huestises’ arguments concerning this issue. In essence, they insist that they
are not bound by the buyer’s representation agreement because the Moody Realty agents did not sign
the contract in the presence of Mr. Huestis; because the agents altered the termination date without
7
W e note as an initial matter that on appeal, the Huestises do not raise the issue of the trial court’s dismissal
of their counter-complaint for breach of contract, the substance of which they utilized as an affirmative defense to
establish that Moody Realty’s breach excused them from performing.
-7-
Mr. Huestis’s knowledge; because they did not receive a copy of the contract signed by both parties;
and because Mrs. Huestis did not sign the contract.
The Huestises appear to attack assent on both sides of the contract. They first suggest that
the agents did not assent because they did not sign the agreement in the presence of Mr. Huestis.
They next contend that, even though Mr. Huestis signed the agreement, his signature did not
constitute effective assent because he was ignorant of the change in the contract termination date.
Although we perceive these arguments to be disingenuous, we nevertheless address them below and
find that the record reveals mutual assent even if we assume the Huestises have presented an accurate
version of events.
The Huestises also assert that the trial court had a basis to void the contract as against public
policy under Tennessee Code Annotated Section 62-13-312(b)(8). They contend that this provision
requires real estate agents and brokers to provide a written copy of the agency contract, executed by
both parties, to the client for the contract to be valid. Yet, the statutory authority cited by the
Huestises applies only to a disciplinary action, and we are unconvinced that Moody Realty violated
it in any event. This authority thus cannot serve as a statement of policy upon which this Court will
void a contract. Finally, the record contains insufficient evidence to conclude that Mrs. Huestis
assented to be bound by the contract. Even though she failed to sign it, that failure does not vitiate
the contract between Mr. Huestis and Moody Realty.
Mutual Assent to be Bound
The Huestises first contend that the agents’ refusal to sign the agreement in the presence of
Mr. Huestis prevented the formation of a binding contract. A contract “must result from a meeting
of the minds of the parties in mutual assent to the terms, must be based upon a sufficient
consideration, free from fraud or undue influence, not against public policy and sufficiently definite
to be enforced.” Staubach Retail Servs.-Southeast, L.L.C. v. H.G. Hill Realty Co., 160 S.W.3d 521,
524 (Tenn. 2004)(quoting Doe v. HCA Health Servs. of Tenn., Inc., 46 S.W.3d 191, 196 (Tenn.
2001)(citations omitted)). Courts determine mutuality of assent by assessing the parties’
manifestations according to an objective standard. Id. In other words, we must determine whether
a reasonable onlooker, based upon the parties’ outward manifestations, would conclude that the
Huestises and the agents agreed to be bound by the terms of the written contract.
We first note that the signatures of parties to a written agreement are not always essential to
establish a binding contract. Id.; T.R. Mills Contractors, Inc. v. WRH Enters., L.L.C., 93 S.W.3d
861, 866 (Tenn. Ct. App. 2002). One function of the signature is to show the signor’s intent to be
bound by the terms stated, but other manifestations of assent can serve the same purpose in the
absence of signature. See Burton v. Warren Farmers Coop., 129 S.W.3d 513, 521 (Tenn. Ct. App.
2002). The parties’ actions or inactions, as well as spoken words, can establish mutual assent.
Id.(citing Cole-McIntyre-Norfleet Co. v. Holloway, 214 S.W. 817, 818 (Tenn. 1919)). “[T]he
existence of a contract, the meeting of the minds, the intention to assume an obligation, and the
understanding are to be determined ... not alone from the words used, but also the situation, acts, and
-8-
the conduct of the parties, and the attendant circumstances.” Scandlyn v. McDill Columbus
Corp., 895 S.W.2d 342, 345 (Tenn. Ct. App. 1994)(quoting APCO Amusement Co. v. Wilkins Family
Rests. of America, 673 S.W.2d 523, 527 (Tenn. Ct. App. 1984)(citations omitted)).
In this case, the trial court made no findings regarding when or before whom the agents
signed the contract, and the proof at trial clarified very little. Nevertheless, we believe the record
supports a finding of mutual assent to be bound even assuming the agents did not sign the agreement
in front of Mr. Huestis. When only one party signs a written contract that contemplates the
signatures of both parties (but does not expressly require it), the law considers it to bind both parties
when the non-signing party accepts it. See Buddy Lee Attractions, Inc. v. William Morris Agency,
Inc., 13 S.W.3d 343, 350 (Tenn. Ct. App. 1999). There is no question that the agents signed the
agreement at some point, but assuming the agents did not sign the agreement in Mr. Huestis’s
presence, the pivotal question then becomes whether the Moody Realty agents sufficiently
manifested their assent to be bound at that time. Or, in other words, we consider whether the agents
accepted Mr. Huestis’s offer.8 We believe the evidence is clear that they did.
First, Mr. Huestis testified that, when asked if they were going to sign the contract, the agents
told him that they did not need to do so. We view this statement, if accurate, as confirmation of their
intent to be bound rather than as a rejection of Mr. Huestis’s offer. Although Mr. Huestis stated to
his wife that he didn’t think they had a contract without the agents’ signatures, he does not assert that
he communicated this understanding to the agents themselves. Thus, Mr. Huestis’s subjective
understanding of this statement, if uncommunicated to the agents and in conflict with an objective
interpretation, has no effect on our analysis. In our estimation, the reasonable onlooker would view
this statement as a manifestation of the intent to be bound. Even more, it evinces a belief that the
contract already had binding effect. Second, Moody Realty agents not only prepared and worded
the agreement, but they also selected the terms written in the blank spaces. The fact that the agents
drafted the very agreement signed by Mr. Huestis, coupled with the statement above, strongly
suggests their assent to be bound.
Third, the agents proceeded to show the Huestises the Hazelton farm after Mr. Huestis
undisputedly executed the agreement. The Hazelton farm was unlisted at that time and would not
have been easily identifiable by non-local buyers. The reasonable person would thus presume that
the agents would identify and show the unlisted property only after entering a binding contract that
8
The legal mechanism by which parties show their assent to be bound is through offer and acceptance.
Generally, when the parties use a form contract providing spaces for both signatures, the party first signing the form is
considered the offeror, and the party signing second the offeree. See C.J.S. Contracts § 75. Though an argument exists
for casting Moody Realty as the offeror, we instead will adhere to this general approach and determine whether the agents
sufficiently accepted Mr. Huestis’s offer.
W e see no reason to address M r. Huestis’s assent, as he signed the agreement and, by signing, manifested his
assent to be bound by its terms. Mr. Huestis’s request for copies of the contract at the end of the day further supports
this conclusion.
-9-
would secure a commission on its sale. The agents began to perform under the contract when they
showed the Huestises the Hazelton farm.
Finally, Mr. Fuchs’ subsequent telephone calls to the Huestises reflected the agents’
understanding that the representation agreement was indeed valid. Had he not intended or
understood himself to be bound by the contract, Mr. Fuchs would not have taken the time to follow
up no less than three times with Mr. Huestis. In sum, even if Mr. Huestis subjectively believed the
agents had not accepted the offer or assented to be bound by the contract, the objective onlooker
would view the agents’ statements and conduct as clear manifestations of assent. Even if the agents
signed the agreement weeks later, they effectively accepted Mr. Huestis’s offer on the day they
identified and showed him the Hazelton farm.
Mutual Assent to the Terms of the Written Contract
The formation of a contract also depends upon mutual assent to sufficiently definite terms.
Staubach Retail Servs., 160 S.W.3d at 524. The Huestises contend that Mr. Huestis could not have
assented to the terms of the contract if he was unaware of the changed termination date. Tennessee
Code Annotated Section 47-50-112(a) provides that:
[a]ll contracts . . . in writing and signed by the party to be bound . . . shall be prima
facie evidence that the contract contains the true intention of the parties, and shall be
enforced as written; provided, that nothing herein shall limit the right of any party to
contest the agreement on the basis it was procured by fraud or limit the right of any
party to assert any other rights or defense provided by common law or statutory law
in regard to contracts.
Tenn. Code Ann. § 47-50-112(a) (2001). Mr. Huestis, the party to be bound, signed a written
agreement, and we begin with the presumption that it contained his intentions and that he assented
to be bound by those terms. Our review of the record reveals that the “1-1-06" termination date was
on the agreement at the time he signed it. The factual dispute hinges mostly on the extent of Mr.
Huestis’s awareness of that date; yet, there is no need to determine what Mr. Huestis knew and when
he knew it. Mr. Huestis’s awareness of the term is irrelevant in this analysis because he had an
obligation to read the agreement before signing it, is thus charged with the knowledge of the terms
therein, and, in any event, ratified the agreement by seeking additional copies of the contract and by
failing to object to the term after he learned of it that very day.
One who signs a contract cannot later plead ignorance of its contents if there was an
opportunity to read it before signing. See Solomon v. First American Nat’l Bank, 774 S.W.2d 935,
943 (Tenn. Ct. App. 1989). The law will not allow a party to enter a contract and then seek to avoid
performance because he did not read the agreement or know its contents. Giles v. Allstate Ins. Co.,
-10-
871 S.W.2d 154, 157 (Tenn. Ct. App. 1993) (citing Beasley v. Metro. Life Ins. Co., 229 S.W.2d 146(Tenn. 1950)). Otherwise, written contracts would be worthless. Id. In general, the law holds
parties responsible for what they sign. See id. But see Teague Bros. v. Martin & Bayley, Inc., 750
S.W.2d 152, 158 (Tenn. Ct. App. 1987)(excluding from this general rule situations in which the
neglect to read was induced through artifice or trick by the party seeking to enforce the contract).
In this case, Mr. Huestis signed a two-page contract with only a handful of written terms. The
termination date was the second handwritten term, located on the first page of the agreement, just
under his handwritten name identifying him as the “Client.” Not only was the term conspicuous, but
the agreement was concise. If Mr. Huestis signed this agreement without reading it first, which
appears to be the case, then he did so at his own peril.
The Huestises suggest in their reply brief the possibility of mistake, fraud, or
misrepresentation. For example, they argue that there could be no mutual assent when Mr. Huestis
was mistaken as to the expiration date. They also imply that the agents surreptitiously altered the
termination date without Mr. Huestis’s knowledge and tricked him into signing the agreement. They
have done nothing more than suggest these formation defects on appeal and have cited nothing
beyond a passing reference to them from a Corpus Juris Secundum volume. Even if the Huestises
had proven fraud with respect to the termination date, Mr. Huestis ratified the agreement by
acquiescence. If, after discovering fraud, a party implies his acquiescence in the act or remains silent
in situations suggesting his acquiescence, he cannot then maintain a claim in fraud. Brandon v.
Wright, 838 S.W.2d 532, 534 (Tenn. Ct. App. 1992) (citing Gilbert v. Hunnewell, 59 Tenn. 289(1873)). Indeed, a voidable contract can be ratified by acts or statements, and one who has failed to
object timely to the circumstance while aware of it has confirmed its validity. Id.(citing Fidelity
Bank & Trust Co. v. Cain Partnership, Ltd., 738 S.W.2d 638 (Tenn. Ct. App. 1987); Russell v.
Zanone, 404 S.W.2d 539 (Tenn. Ct. App. 1966)). Mr. Huestis testified that he knew about the term
by the end of the day, yet he nevertheless sought another copy of the contract, failed to object to the
term, and took Mr. Fuchs’ subsequent calls without mentioning anything about the validity of the
contract or the alleged surreptitious alteration of the termination date.
Voidness and Public Policy
The Huestises also assert that the trial court could have voided the contract as violative of
public policy under Tennessee Code Annotated Section 62-13-312(b)(8). The Huestises argue that
this provision requires real estate agents and brokers to provide a written copy of the agency contract,
executed by both parties, to the client for the contract to be valid.9 That section, however, exists only
to “provide guidelines for disciplinary actions taken by the Tennessee real estate commission against
licensees found guilty of the [listed] violations.” Tenn. Code Ann. § 62-13-312(e) (1997). Indeed,
9
The provision allows the real estate commission to take disciplinary action in the event a licensee fails “to
furnish a copy of any . . . contract relevant to a real estate transaction to all signatories thereof at the time of execution.”
Tenn. Code Ann. § 62-13-312(b)(8) (1997).
-11-
this Court has found that this particular section does not prohibit even oral listing agreements. See,
e.g., Parks v. Morris, 914 S.W.2d 545 (Tenn. Ct. App. 1995). And, although the Tennessee Code’s
provisions addressing representation by real estate agents require a “written bilateral agreement that
establishes the [agreed-upon] terms and conditions” for an agency relationship to arise, they do not
expressly require both parties’ signatures on the written agreement. See Tenn. Code Ann. § 62-13-
401 (1997) (providing also that an agency relationship is not necessary for a real estate agent to
provide services to a party in a prospective transaction). Nor did the Legislature include real estate
brokerage contracts per se in the statute of frauds. See Tenn. Code Ann. § 29-2-101 (2000 & Supp.
2006). If it had, though, this agreement would satisfy the statute, as the “party to be charged,” Mr.
Huestis, signed it. Indeed, once a written contract has been signed by one party and accepted by the
other, it is a binding written contract in the contemplation of the law. See T.R. Mills Contractors,
93 S.W.3d at 866; Buddy Lee Attractions, 13 S.W.3d at 350. Ironically, the party providing the
missing first page of the contract is the very one seeking to avoid the obligations listed therein.
Absence of Mrs. Huestis’s Signature
The record contains very little evidence regarding Mrs. Huestis’s dealings with the Moody
Realty agents. It reveals little more than Mrs. Huestis’s presence during most of the interactions with
the agents, her inquiry about the contract before its completion and presentation to the couple, and
her mere placement of it on the car seat when asked to sign it. Even though Mrs. Huestis admitted
that she might have signed the contract if she had discussed it further with her husband that day, we
find no outward manifestations of assent on her part. We therefore conclude that Mrs. Huestis was
not a party to the contract with Moody Realty. We also conclude that the absence of her signature
on the agreement does not undermine the formation of the contract between her husband and the
agency. There is no express language requiring her signature for the contract to be valid, and the
handwritten term on the second page recites that the contract is binding on “Ron Huestis” for the
identified properties. Thus, the absence of her signature, the wording of the document itself, and the
surrounding circumstances bring us to the conclusion that Mrs. Huestis was not a party to the
contract but that, notwithstanding this fact, the contract remained binding upon her husband.
Performance, Breach, and Damage
If the agents discharged their obligations under the contract and the Huestises refused to pay
the commission following their purchase of the farm, then there is breach of contract and entitlement
to money damages. Although the trial court never reached the issue of whether the Huestises
breached the contract, the record amply supports such a finding: they refused to pay the commission.
As for Moody Realty’s performance, the agents tendered valuable services to Mr. Huestis when they
identified a dairy farm the Huestises were unlikely to locate without an agent’s assistance and gained
access to the property for their consideration. And, although the contract states that Moody Realty
earns the commission when the buyer and seller enter a contract for purchase through the efforts of
-12-
the agency, Moody Realty discharged its obligations under the contract and earned its commission.
Where parties to a bilateral contract are obligated to carry out certain tasks that are necessary
for the realization of benefits under the agreement, each party has the right “to proceed free of
hindrance by the other party. [I]f such other party interefere[s], hinder[s], or prevent[s] the
performance to such an extent as to render the performance difficult and diminish the benefits to be
received, the first party [can] treat the contract as broken and [is] not bound to proceed under the
added burdens.” Wil-Helm Agency v. Lynn, 618 S.W.2d 748, 751–52 (Tenn. Ct. App. 1981). Mr.
Huestis hindered the agents from providing their full range of services when he unequivocally told
Mr. Fuchs by telephone that he was not interested in the Hazelton farm and when he failed to contact
Moody Realty to inform the agents of his newfound interest in late November or early December.
“[W]here the obligation of a party depends upon a certain condition being performed and
the fulfillment of that condition is prevented by the act of the other party, the condition is considered
fulfilled.” ACG, Inc. v. Southeast Elevator, Inc., 912 S.W.2d 163, 167-168 (Tenn. Ct. App. 1995)
(quoting from an opinion of the Texas Court of Appeals and equating the Texas rule to its Tennessee
counterpart). Although the contract between Moody Realty and Mr. Huestis contemplated the
performance of more extensive services, we consider the agents to have fully performed under the
contract where the Huestises never told them of their interest in the property and thus never allowed
them to perform the services they were prepared to deliver.
Finally, the Huestises attempted to set up the defense of excused performance by virtue of
the agents’ breach of fiduciary duty, but most of their allegations on the subject lacked merit in light
of their immediate disavowal of interest in the property. For example, the Huestises complained of
receiving an old MLS sheet with an inflated price, but Mr. Huestis never testified to inquiring into
the purchase price of the farm beyond what was shown on the MLS sheet or to asking about the
agents’ opinion of how flexible Mr. Hazelton might have been in negotiating a lower price. In any
event, the Huestises failed to present any argument in their reply brief concerning this issue and
failed to raise the issue of the trial court’s dismissal of their breach of contract claim. We therefore
conclude that the agents performed under the contract, Mr. Huestis breached it, and Moody Realty
is entitled to its eight percent (8%) commission.
Conclusion
We believe the evidence preponderates against the trial court’s finding that there was no
meeting of the minds and thus no contract. On the contrary, we find the record amply supports
mutual assent to the terms of the contract. Mr. Huestis signed the contract, and the agents
manifested their assent by their statements, conduct, and signatures on the document. We also find
that the record reveals that the “1-1-06" termination date was on the document at the time Mr.
Huestis signed it. The buyer’s representation agreement was a concise, two-page document, and the
-13-
termination date was conspicuous. As parties to a contract are under a duty to read written
agreements and are thus responsible for what they sign, we accordingly hold Mr. Huestis to the terms
of the buyer’s representation agreement. Even if he was unaware of the termination date when he
signed the agreement, he learned of it that day yet failed to take action and object to the term.
We accordingly vacate the trial court’s award of damages in quantum meruit and reverse the
trial court’s finding of no contract as to Mr. Huestis. We otherwise affirm the trial court’s judgment
and remand this case for entry of judgment in accordance with the contract. Costs of this appeal are
taxed to Ronald L. Huestis, Lisa M. Huestis, and their surety, for which execution shall issue if
necessary.
___________________________________
DAVID R. FARMER, JUDGE
-14-