Estate of Lucille Osborn v. Kemp

Lucille Osborn (plaintiff) bought a house in 1968. On April 16, 1985, Osborn agreed to sell the house to Michael Kemp (defendant). Kemp drafted a contract providing that he would pay Osborn “$275.00 per month plus utilities for twenty years for the purchase of [the house] for $50,000.” Osborn and Kemp signed and notarized the document that same day. For the next 20 years, Kemp lived in the house and paid $275 per month to Osborn. Kemp also made $11,000 worth of improvements to the house. In May 2006, Osborn began to suffer from dementia and was subsequently cared for by her niece, Sharon Gillespie (plaintiff), who had no knowledge of the contract. Gillespie assumed that Kemp had leased the house. On August 17, 2007, Gillespie filed suit on Osborn’s behalf against Kemp, seeking a permanent injunction, declaratory judgment, and restitution. Kemp counterclaimed for specific performance based on the contract. Osborn could not testify and died at the time of trial. The chancery court ordered specific performance and dismissed Gillespie’s complaint with prejudice. The chancery court ordered Kemp to pay $50,000 within 90 days, as well as interest compounded quarterly from April 16, 2005. Gillespie appealed, arguing that the payment term of the contract was indefinite, that Kemp was not ready or able to perform because he did not have financing at the time of trial, and that the balance of equities tipped against specific performance because the house cost $106,000 in 1986 and Kemp would pay only $116,000 for the house 20 years later.