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Dixon v. Timber Ridge, LLC

Court of Appeals of Mississippi

June 25, 2019

TREMAYNE DIXON AND TYREASE DIXON APPELLANTS/ CROSS-APPELLEES
v.
TIMBER RIDGE, LLC APPELLEE/ CROSS-APPELLANT

          DATE OF JUDGMENT: 02/09/2018

          DESOTO COUNTY CHANCERY COURT HON. MITCHELL M. LUNDY JR.

          ATTORNEYS FOR APPELLANTS: PATRICK VANCE DALY BRETT CLANTON PICKLE

          ATTORNEY FOR APPELLEE: WILLIAM P. MYERS

         EN BANC.

          J. WILSON, P.J.

         ¶1. Tremayne and Tyrease Dixon entered into a contract with Timber Ridge LLC to buy a house in Olive Branch. When the parties signed their contract, the "spec home" was still under construction. Subsequently, there were misunderstandings about the level of design input that the Dixons would have in the final phases of construction. Due to these misunderstandings, Timber Ridge offered to refund the Dixons' earnest money and cancel the contract, but the Dixons declined and said that they still wanted to buy the house. The week of the closing date, the parties exchanged emails about the status of the house, the home inspection, and the Dixons' demands that Timber Ridge address various issues with the house. Timber Ridge did not address the Dixons' demands to the Dixons' satisfaction. On the closing date, Timber Ridge was ready and willing to transfer title, but the Dixons did not appear. The Dixons claim that delays and other breaches by Timber Ridge prevented the closing. Timber Ridge declined to reschedule the closing to sell the house to the Dixons, and the Dixons filed suit in chancery court.

         ¶2. After a two-day trial, the chancellor found that the Dixons breached the contract by failing to appear at closing and that both parties repudiated the contract at different points prior to closing. The chancellor denied the Dixons' claim for specific performance and denied the parties' respective claims for damages and attorney's fees. The chancellor found that "the most equitable thing[] to do" would be to cancel the contract and refund the Dixons' earnest money. Both parties appealed. We affirm the judgment of the chancery court.

         FACTS AND PROCEDURAL HISTORY

         ¶3. Tremayne and Tyrease Dixon were planning to move from Illinois to Mississippi, and they looked at houses in the Miller Farms subdivision in Olive Branch. On August 17, 2016, the Dixons, through their realtor, Brenda McRae, made an offer on a house in the subdivision. The house was still under construction when the Dixons made their offer. The owner/builder, Timber Ridge, made a counteroffer through its realtor, Shelly Bookwalter. After the counteroffer, the Dixons, McRae, and Bookwalter exchanged a series of text messages. In those messages, the Dixons stated that they wanted the floors upgraded to hardwood throughout the first level of the house. Later, the Dixons stated that they wanted "hardwood upgraded only on 1st level." Bookwalter responded, "Ok that is no prob."

         ¶4. On August 20, the Dixons signed Timber Ridge's counteroffer to sell the house for $299, 870, with a closing date of September 29, 2016. The contract required the Dixons to deposit earnest money of $2, 500 and provided that time was of the essence. The contract also specified that it could not be changed without the parties' written, mutual consent.

         ¶5. Although the Dixons requested hardwood floors via text message and Bookwalter seemingly agreed to their request in a responsive text, the contract itself was not amended to provide for hardwood floors throughout the first floor of the house. The Dixons' original offer provided only that hardwood floors would be "installed in the second bedroom down." No other provisions regarding hardwood floors were added to the contract.

         ¶6. The parties also signed a Home Inspection Addendum. The addendum provided that the Dixons were to arrange for a home inspection within ten days "after completion" of the house. The Dixons had the right to enter the house at reasonable hours with twenty-four hours' prior notice. After the inspection, the Dixons could provide Timber Ridge a written list of any deficiencies, and Timber Ridge then had three days to consent in writing to correct deficiencies "in an amount not to exceed $1, 000." If the Dixons identified deficiencies that exceeded the $1, 000 limit, Timber Ridge could correct the deficiencies above the limit and proceed to closing. If Timber Ridge declined to correct deficiencies in excess of the $1, 000 limit, then the Dixons could either "accept" those deficiencies and proceed to closing or "cancel the contract" and receive a refund of their earnest money.

         ¶7. Because the subject house was still under construction when the Dixons contracted to buy it, they toured a completed house in the same subdivision that had the same style and layout to get an idea of what their house would look like when finished. They also reviewed the multiple listing service (MLS) listing for the subject house, which advertised "tile medallions in entrance and bath" and "2 shower heads." The listing included a disclaimer that the information provided was "deemed to be reliable, but [was] not guaranteed."

         ¶8. On August 29, 2016, the Dixons visited the house again while it was still under construction. Afterward, they emailed Bookwalter with a number of design complaints and concerns, including paint colors, the color of the shutters, standing water on an adjacent lot near the property line, the absence of a "medallion" in the master bathroom, and the lack of two shower heads mentioned in the MLS listing. They also asked about extending the front and back patio areas, keyless entry pads for the garage, and slow-closing toilet lids.

         ¶9. Bookwalter responded on August 31 and explained that many of the house's features were the same as the finished house that the Dixons toured prior to signing the contract. She said that there would be a tile medallion in the foyer but not in the master bathroom. She explained that "[a] double shower head will be installed [in the master bathroom] and was just covered up behind the wall per the plumber. . . . You will get [double] shower head per the MLS listing because it is already partially in place." She gave estimates for some of the additional changes requested by the Dixons.

         ¶10. Bookwalter sent another email on September 1, apparently in response to another email from the Dixons. She again explained that the home was a "spec home," meaning that it was not custom-designed or custom-built, and that any changes to design should have been proposed prior to signing the contract. She also noted that the MLS listing was not a contract and specified that information contained on the listing was not guaranteed. Bookwalter again explained that there would be no medallion in the master bathroom due to cost, even though the MLS listing had the bathroom medallion as a feature. She also again confirmed that the double shower head would be installed.

         ¶11. On September 6, the Dixons again emailed Bookwalter with a list of concerns, including questions about a "burn pile" in the backyard, landscaping requests, lighting options, and a specific brand of dishwasher. Bookwalter responded to McRae, the Dixons' realtor. Bookwalter said that given the Dixons' numerous concerns and questions, Timber Ridge did not feel that they could make the Dixons happy. Timber Ridge offered to refund the earnest money and cancel the contract.

         ¶12. Bookwalter sent another email on September 7 that stated that the home would not be finished on time due to "the constant request for changes" by the Dixons. She stated that the Dixons' requests to change the cabinet layout had delayed granite countertop installation, electrical wiring, and painting. She said that there were similar issues related to the floor and the yard. Because of those delays, Timber Ridge offered to release the earnest money and cancel the contract. Bookwalter also said that the house would not be complete by the contract's September 29 closing date. Attached to the email was a disbursement and release form for the earnest money and cancellation of the contract.

         ¶13. The Dixons did not sign the release. They emailed Bookwalter on September 8 and stated that they still wanted to buy the house. The Dixons apologized if they had offended anyone with their many questions. They stated that they had misunderstood the level of input they would have in a spec home. They stated that they had secured financing, a home inspection, and insurance in order to close on September 29, and they asked Timber Ridge to consider extending the closing date to allow time for the house to be completed.

         ¶14. Bookwalter emailed McRae on September 9 and reiterated that Timber Ridge did not want to go forward with the contract because "they strongly feel that they will not be able to make the Dixon's [sic] happy in the end . . . due to previous dealings and emails." Bookwalter reiterated that Timber Ridge would not extend the closing date but would agree to cancel the contract and refund the Dixons' earnest money.

         ¶15. Tremayne Dixon testified that after the September 9 email, he and his wife continued to take steps necessary to close on the house. On September 15, the Dixons emailed McRae to ask her to find out when the house would be ready for inspection. On September 19, the Dixons emailed Bookwalter that the home inspection was scheduled ...


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