                 IN THE COURT OF APPEALS OF TENNESSEE
                             AT NASHVILLE
                                    July 11, 2001 Session

 MARTIN HERRICK, ET UX. v. MIKE FORD CUSTOM BUILDERS, LLC

               Direct Appeal from the Chancery Court for Williamson County
                            No. 26004    Russ Heldman, Judge



                   No. M2000-02569-COA-R3-CV - Filed August 13, 2001


The Herricks entered into a sales agreement with Mike Ford for the construction of a home. The
sales agreement provided that the deposit paid by the Herricks became non-refundable upon the
presentation of a loan commitment letter. The Herricks presented Mike Ford with a loan
commitment letter from Southeastern Mortgage Company which was conditioned upon proof of
employment. Mr. Herrick was terminated from his employment, and, as a result, Southeastern
denied the Herricks’ loan application. The Herricks demanded Mike Ford return their deposit. Mike
Ford refused, contending that the deposit became non-refundable at the time the Southeastern loan
commitment letter was presented. Both parties filed motions for summary judgment. The trial court
granted summary judgment in favor of the Herricks. We reverse and remand.


  Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Reversed; and
                                        Remanded

DAVID R. FARMER , J., delivered the opinion of the court, in which W. FRANK CRAWFORD, P.J., W.S.
and ALAN E. HIGHERS, J., joined.

R. Francene Kavin, Brentwood, Tennessee, for the appellant, Mike Ford Custom Builders, LLC.

P. Edward Schell, Franklin, Tennessee, for the appellees, Martin Herrick and Lydia Herrick.

                                            OPINION

        Martin Herrick (Mr. Herrick) and Lydia Herrick (Mrs. Herrick, or collectively, the Herricks)
entered into a sales agreement (the agreement) with Mike Ford Custom Builders (Mike Ford) for the
construction of a home in Williamson County, Tennessee. The agreement provided that the Herricks
would pay a deposit of $22,495 upon the signing of the agreement which would be credited against
the purchase price of $449,900 at closing. The deposit became non-refundable upon presentation
of a loan commitment letter or other evidence of financial ability. Regarding the loan commitment,
the agreement provided as follows:
       LOAN COMMITMENT: Buyer will apply for mortgage loan within (3) working
       days of the acceptance of this offer and shall present loan commitment or other
       evidence of financial ability to Seller within fourteen (14) days from said acceptance.
       This agreement [is] contingent upon Buyers ability to obtain loan commitment letter.
       All of buyer’s deposit(s) shall be non-refundable upon Buyer[’s] presentation of loan
       commitment or evidence of financial ability to Seller.

       Mr. Herrick applied with Southeastern Mortgage Company (Southeastern) and received a
conditional loan approval which read as follows:

              Southeastern Mortgage of Tennessee, Inc. is pleased to issue this conditional
       loan approval to you on the house located at 9462 Waterfall Road, Brentwood,
       Tennessee 37027. Your loan application and supporting documentation has been
       reviewed and conditionally approved subject to meeting the following: . . . . No
       adverse changes in employment/income/assets/liabilities or credit.

Mr. Herrick accepted the loan commitment and presented the Southeastern letter to Mike Ford.
Mike Ford contacted Southeastern and was assured by Southeastern that the letter received from Mr.
Herrick containing the language, “conditional loan approval,” was a standard commitment letter and
that the approval was given conditionally upon certain criteria being met by the Herricks at the time
of closing.

        Construction of the home began during late summer, 1998. In November of 1998, Mr.
Herrick notified Southeastern that his employment had been terminated. He then made a demand
on Mike Ford for the return of the deposit. Mike Ford refused, saying that the deposit became non-
refundable at the presentation of the Southeastern loan commitment letter. The Herricks then filed
suit against Mike Ford, alleging that their ability to obtain financing was a condition precedent to
their obligation to perform under the agreement. Both parties filed a motion for summary judgment.
The trial court determined that the financing contingency was a condition precedent to the parties’
performance under the agreement; the Herricks were unable to obtain financing and thus were unable
to perform their obligations under the agreement; and, as such, the Herricks were entitled to the
return of their deposit. This appeal ensued.

       Mike Ford raises the following issues, as we perceive them, for this court’s review:

       1.      Whether the trial court erred in granting summary judgment in favor of the
               Herricks.

       2.      Whether the trial court erred in finding that the agreement contained a
               condition precedent which served to excuse the Herricks from performance
               under the agreement.




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       3.      Whether the trial court erred by finding the requirement of providing a loan
               commitment letter and the Herricks’ inability to obtain a loan not to be
               severable and independent of each other.

       4.      Whether the trial court erred in its contract interpretation.

        This appeal is from a grant of summary judgment. In their respective briefs, both parties
concede that there are no genuine issues of material fact as is evidenced by the filing of cross
motions for summary judgment. Summary judgment is appropriate if no genuine issues of material
fact exist and the movant proves it is entitled to a judgment as a matter of law. See Tenn. R. Civ.
P. 56.03. On appeal, we must take the strongest view of the evidence in favor of the nonmoving
party, allowing all reasonable inferences in its favor and discarding all countervailing evidence. See
Shadrick v. Coker, 963 S.W.2d 726, 731 (Tenn. 1998) (citing Byrd v. Hall, 847 S.W.2d 208, 210-11
(Tenn. 1993)). Since our review only concerns questions of law, we review the record de novo with
no presumption of correctness of the judgment below. See Tenn. R. App. P. 13(d); Bain v. Wells,
936 S.W.2d 618, 622 (Tenn. 1997).

        The main issue before this court is the interpretation of the following agreement provision,
“All of buyer’s deposit(s) shall be non-refundable upon Buyer[’s] presentation of loan commitment
or evidence of financial ability to Seller.” It is settled law in Tennessee that the meaning of a
contract provision is a question of law. See Bradson Mercantile, Inc. v. Crabtree, 1 S.W.3d 648
(Tenn. Ct. App. 1999). If the contract language is plain and unambiguous, it is the court’s duty to
interpret the contract as it is written, applying to the words of the contract their usual, natural, and
ordinary meaning. See Johnson v. Johnson, 37 S.W.3d 892, 896 (Tenn. 2001); Hardeman County
Bank v. Stallings, 917 S.W.2d 695 (Tenn. Ct. App. 1995) perm. app. denied. A contract is
ambiguous when its meaning is uncertain and can fairly be understood in more ways than one. See
Johnson, 37 S.W.3d at 896 (citing Farmers-Peoples Bank v. Clemmer, 519 S.W.2d 801, 805
(Tenn. 1975)). We believe the language in the agreement before this court is clear: the Herricks’
deposit becomes non-refundable upon the presentation of a loan commitment letter. The agreement
does not state that the loan commitment letter had to be free of conditions; rather, it simply says that
upon presentment of loan commitment, the deposit becomes non-refundable. It is uncontested that
the conditions listed in the Southeastern loan commitment letter were for the benefit of the mortgage
company. Further, Southeastern stated in its affidavit that the loan commitment letter containing the
language, “conditional loan approval,” was a standard commitment letter and that the criteria
contained in the loan commitment letter had to be met by the Herricks at the time of closing. We
conclude that the presentation of the Southeastern loan commitment letter to Mike Ford made the
Herricks’ deposit non-refundable. Due to our finding, all remaining issues are pretermitted.

        Based upon the foregoing, we reverse the judgment of the trial court, and remand this case
for entry of summary judgment in favor of the appellants, Mike Ford Custom Builders, LLC. The




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costs of this appeal are taxed to the appellees, Martin Herrick and Lydia Herrick, and their surety,
for which execution may issue if necessary.



                                                      ___________________________________
                                                      DAVID R. FARMER, JUDGE




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