GARRETT J. PRESTENBACH, JR. AND IRENE E. PRESTENBACH
J. GERALD COLLINS
COURT FROM WHICH APPEALED: MARION COUNTY CHANCERY COURT. DATE OF JUDGMENT: 08/27/2012. TRIAL JUDGE: HON. JOHNNY LEE WILLIAMS, TRIAL COURT ATTORNEYS: L. CLARK HICKS, JR., SAMUEL STEVEN McHARD.
FOR APPELLANT: L. CLARK HICKS, JR., R. LANE DOSSETT.
FOR APPELLEE: SAMUEL STEVEN MCHARD.
ON WRIT OF CERTIORARI
NATURE OF THE CASE: CIVIL - REAL PROPERTY
¶1. We granted certiorari in this case to correct a fundamental misunderstanding of the law on option contracts and specific performance. The option holder timely exercised his option to purchase and is entitled to specific performance, so we reverse and remand.
FACTS AND PROCEDURAL HISTORY
¶2. On September 15, 2011, Gerald Collins granted Garrett Prestenbach a one-year option to purchase about 150 acres of Collins's farm and pasture land for $500,000. Prestenbach agreed to make a $25,000 down payment on the property and finance the remaining $475,000 through a combination of a $225,000 USDA loan and $250,000 financing agreement with Collins. The parties signed the financing agreement that same day.
¶3. The option contract included the following details: (1) a recital of $100 consideration; (2) a township-and-range description of the property; (3) a reference to the buyer's intent to obtain a USDA loan; (4) the total purchase price; and (5) a recital that the option was irrevocable for the first three months and, after three months, the option could be revoked by giving ten days' written notice. The parties also agreed that Collins would allow the USDA to inspect the property before closing.
¶4. About a month after giving Prestenbach the option to purchase his land, another buyer offered to buy Collins's property immediately. Collins attempted to persuade Prestenbach to give up his option so he could sell to the other party, but Prestenbach refused and quickly recorded the option contract to prevent the sale.
¶5. By early December, relations between Collins and Prestenbach had deteriorated. On December 8, 2011, Collins's attorney sent Prestenbach a letter attempting to terminate the one-year option " upon the latter to occur of December 15th, its date of expiration, or ten (10) days after receipt of this notice." Prestenbach responded on December 16, 2011, by hand-delivering a letter exercising his option to purchase. At that time, the USDA loan ...