Court orders property sale reversed after contract dispute – see what triggered the legal battle
A $721,000 Tennessee property sale collapsed at closing – now a court’s reversal is shaking up deal enforcement for mortgage pros.
Here’s what happened. Back in early 2021, Karl and Beth Ann Kokko set their sights on a 100-acre property in Moore County, Tennessee. They put in an offer, complete with an escalation clause – basically, a promise to beat the highest competing bid by $1,000, up to $800,000. The sellers, Thomas and Wendy Moore, were working with Crye-Leike of Nashville, Inc., a well-known brokerage. As offers rolled in, including one from MOCAR Enterprises, Inc. for $730,000, the Moores countered the Kokkos at $721,000, and the Kokkos accepted. The closing was set for March 3, 2021.
But things didn’t go smoothly. The Moores started raising questions about the Kokkos’ financing, saying their initial bank letter wasn’t good enough. The Kokkos quickly got a formal commitment letter from their bank, but before closing day, the Moores pulled the plug, telling the Kokkos the property was no longer for sale. On closing day, the Kokkos showed up, ready to sign, but the Moores refused to participate and wouldn’t even let them inspect the property.
Not long after, the Moores sold the property to MOCAR Enterprises, Inc. – the same company that had put in a competing offer. The Kokkos, feeling wronged, took the matter to court. They accused the Moores of breaking the contract, claimed MOCAR and its principals, Gregg and Daffney Driver, had interfered, and asked for the deal to be enforced. Crye-Leike, the listing brokerage, also jumped in, seeking its commission.
The trial court sided mostly with the Kokkos. It found that the Moores had breached the contract and ordered them to sell the property to the Kokkos for $721,000, even though the property had already been sold to MOCAR. The court also awarded Crye-Leike its commission and hit the Drivers and MOCAR with sanctions for failing to cooperate during the legal process.
On appeal, the Tennessee Court of Appeals took a close look at the facts. The judges agreed that the Moores had broken the deal and that the Kokkos had done what they were supposed to do, including providing the right bank letter. The court said the Kokkos didn’t have to hand over the money at closing because the Moores had already made it clear they wouldn’t go through with the sale. The appeals court also backed the trial court’s decision to unwind the sale to MOCAR, since MOCAR knew about the Kokkos’ claim before buying the property.
One twist: the appeals court said the trial judge went too far in finding a civil conspiracy. According to the court, you can’t conspire to break your own contract, and a company can’t conspire with its own agents. So, that part of the ruling was thrown out, and the case was sent back to the lower court to sort out those claims and figure out how much the Kokkos should get for their legal fees on appeal.
For mortgage professionals, this case is a real-world reminder that deals can unravel fast – and when they do, the fallout can be messy and expensive. It’s a lesson in making sure every “i” is dotted and every “t” is crossed, especially when big money and multiple parties are involved. The decision also shows that courts can and will unwind a sale if a contract is broken and the buyer is left out in the cold.
While the case isn’t quite over – there’s still some work left for the lower court – it’s already a strong signal to anyone in the mortgage and real estate world: don’t take shortcuts, and don’t underestimate the power of a well-written contract. This one’s worth a second look, whether you’re closing deals or advising clients on how to avoid a similar fate.
