## Facts

- Jimmy B. Hillard and Wilma J. Hillard (purchasers) and Buddie Ruth Franklin (seller) signed a written agreement for the sale of Franklin’s real property in Tennessee for $80,000.
- The agreement called for $10,000 to be paid “at closing,” with the balance to be paid over time in installments.
- The agreement did not set a specific closing date.
- The property included a residence and a mobile home, and the agreement contained terms allowing a named occupant to remain in the mobile home for life, subject to stated conditions.
- Before the parties closed, a fire destroyed the house on the property.
- Franklin received approximately $35,000 from her homeowner’s insurer related to the fire loss.
- The sale did not close, and Franklin did not credit the insurance proceeds toward the contract price.
- The Hillards sued for specific performance, asking the court to order the conveyance and to reduce the purchase price by the insurance proceeds Franklin received (seeking an adjusted price of $45,000).
- Franklin opposed specific performance and challenged enforceability, raising objections such as lack of mutual assent, alleged defects in execution/notarization, the absence of Wilma Hillard’s signature, and an argument that the Hillards failed to pay the $10,000 down payment.
- The trial court granted summary judgment for the Hillards and ordered specific performance at the reduced price; Franklin appealed.

## Issues

1. Whether the purchasers were entitled to specific performance of the real-estate contract despite the seller’s objections to contract formation and execution.
2. Whether, after a pre-closing fire and the seller’s receipt of insurance proceeds, equity required that the insurance recovery be credited against the purchase price in decreeing specific performance.
3. Whether summary judgment was proper given the seller’s claimed disputes.

## Decision

- The Tennessee Court of Appeals affirmed the trial court’s grant of summary judgment to the Hillards.
- The court held the written contract was enforceable against Franklin and that the objections she raised did not create a triable issue preventing specific performance.
- The court concluded the Hillards were not in default for failing to pay the $10,000 because the contract made that payment due at closing and no closing occurred.
- The court affirmed ordering specific performance at a reduced purchase price that credited Franklin’s insurance proceeds, preventing her from retaining both the proceeds and the full contract price for the destroyed improvement.

## Legal Principles

- Real property is commonly treated as unique, so specific performance is an available remedy when an enforceable land-sale contract exists and damages are inadequate.
- A court interprets an unambiguous written contract by its plain terms rather than by claims of subjective intent.
- Under Tennessee’s Statute of Frauds, a land-sale contract is enforceable against the party to be charged if that party signed; the absence of the other party’s signature does not necessarily bar enforcement against the signer.
- When a contract makes a payment due “at closing,” a buyer’s failure to tender that payment before closing does not constitute breach if closing never occurs.
- Under equitable conversion and related equitable principles, once the parties form a binding contract for the sale of land, the buyer generally bears the risk of loss to the property before closing; if the seller’s insurance pays for the loss, equity may treat the proceeds as a substitute for the destroyed improvement.
- In decreeing specific performance after a casualty loss, a court may require that insurance proceeds received by the seller be credited against the purchase price to avoid an unjust double recovery.
- Summary judgment is appropriate when the material facts are undisputed and the remaining disputes are legal questions; a party cannot defeat summary judgment with assertions that do not show a genuine factual conflict.

## Conclusion

Hillard v. Franklin affirmed summary judgment granting the purchasers specific performance of an $80,000 land-sale contract after the house burned before closing, holding the contract enforceable against the seller and requiring that the seller’s $35,000 insurance recovery be credited against the purchase price so the seller would not receive both the insurance proceeds and the full contract price for the destroyed improvement.


Hillard v. Franklin, 41 S.W.3d 106 (2000)