Fwt v. Haskin Wallace Mason Property Mgmt.

• Decision Date: 25 November 2009
• Docket Number: No. 2-08-321-CV.,2-08-321-CV.
• Parties: FWT, INC., Appellant, v. HASKIN WALLACE MASON PROPERTY MANAGEMENT, L.L.P., Appellee.
• Court: Texas Court of Appeals

301 S.W.3d 787

FWT, INC., Appellant, v. HASKIN WALLACE MASON PROPERTY MANAGEMENT, L.L.P., Appellee.

No. 2-08-321-CV.

Court of Appeals of Texas, Fort Worth.

November 25, 2009.

Haynes and Boone, L.L.P., and David J. Drez III, Josh Borsellino, Fort Worth, TX, for Appellant.

Brackett & Ellis, P.C., and Coby D. Smith, Joseph F. Cleveland Jr., Fort Worth, TX, for Appellee.

PANEL: CAYCE, C.J.; McCOY and MEIER, JJ.

OPINION ON REHEARING

BILL MEIER, Justice.

Appellant FWT, Inc. filed a motion for rehearing and en banc reconsideration of our opinion issued on August 27, 2009. We deny FWT's motion for rehearing and en banc reconsideration, withdraw our opinion and judgment dated August 27, 2009, and substitute the following.

I. INTRODUCTION

Texas law is clear that a right of first refusal empowers its holder with a preferential right to purchase the subject property on the same terms offered by or to a bona fide purchaser. Tenneco Inc. v. Enter. Prods. Co., 925 S.W.2d 640, 644 (Tex. 1996). What is less clear is whether the holder of a preferential right who desires to exercise that right can be required under certain circumstances to purchase assets that are bundled with the subject property. This is the primary issue at the center of a dispute between FWT and Appellee Haskin Wallace Mason Property Management, L.L.P. ("Haskin Wallace"). We will affirm the trial court's orders denying FWT's motion for summary judgment, granting Haskin Wallace's motion for summary judgment, and overruling FWT's objections and special exceptions to Haskin Wallace's motion for summary judgment and response.

II. UNDISPUTED FACTUAL AND PROCEDURAL BACKGROUND

Greg Haskin, Russell Wallace, and Jim Mason are the owners of Haskin Wallace. In 1990, they formed Texas Galvanizing, Inc. Texas Galvanizing is located in Hurst and operates a "hot-dip" galvanizing plant.¹

In 1997, FWT sold to Haskin Wallace approximately six acres of undeveloped real property ("the Property") located in Kennedale and adjacent to FWT's plant. A Correction Warranty Deed ("Deed") identifies FWT as the "Grantor" and Haskin Wallace as the "Grantee"; identifies the Property as that described in an exhibit attached to the Deed, which is a metes and bounds description of the six acres; and includes the following right of first refusal in favor of FWT:

(a) In the event Grantee desires to sell, lease or otherwise convey all or any part of the Property and shall have a bona fide offer from a third party who is ready, willing and able to purchase the Property at a price acceptable to Grantee, then Grantee shall furnish to Grantor written notice of the name of the prospective purchaser and the terms and conditions of such offer. Such notice shall be deemed to have been served and received, when mailed in the United States mail, postage prepaid, by certified mail, return receipt requested, addressed to Grantor at the following address:

                  FWT, Inc
                  P.O. Box 8597
                  Fort Worth, Tarrant County, Texas
                  76124
                

Grantor shall have 20 days after receipt of the notice in which to elect to purchase, lease or otherwise accept such conveyance, as the case may be, at the same price and under the same terms and conditions offered by the prospective purchaser. Such election shall be exercised by written notice given by Grantor to Grantee. [Emphasis added.]

Haskin, Wallace, and Mason created U.S. Galvanizing, L.P. to operate and manage a galvanizing business to be located on the Property. A 22,500-square-foot facility designed for "hot-dip" galvanizing was constructed on the Property, and U.S. Galvanizing commenced operations in December 1998.

Haskin, Wallace, and Mason eventually decided to sell Texas Galvanizing and U.S. Galvanizing. FWT proposed to purchase the businesses for $15.5 million, but Haskin, Wallace, and Mason ultimately reached an agreement with Valmont Industries, Inc. for the sale of the businesses and for the lease or purchase of the Property. By letter dated December 17, 2007, Haskin Wallace notified FWT that Valmont had agreed to purchase the assets of both galvanizing businesses for $16,500,000; to lease the Property from Haskin Wallace for $25,000 per month for five years with two additional five-year options and an option to purchase the Property for $2,500,000; and to sublease from Haskin Wallace the property on which Texas Galvanizing was located. Valmont did not offer to purchase the assets of the businesses independent of the lease or purchase of the Property. According to the December 17 letter, the purchase of one "bundle of assets is contingent upon the purchase of another."

In response to the notification letter, FWT sent a letter dated December 31, 2007, to Haskin Wallace stating as follows:

This letter is to advise you that FWT, Inc. hereby elects to exercise its right of first refusal in the Deed.

Apparently under the impression that FWT desired to exercise its preferential right and purchase the galvanizing businesses under the same terms and conditions as Valmont, counsel for Haskin Wallace responded to FWT's December 31 letter and forwarded to FWT's counsel a "Closing Checklist" and a proposed closing date of January 22, 2008. The checklist identified the "Sellers" as Texas Galvanizing, U.S. Galvanizing, Haskin, Wallace, and Mason, and it listed the due dates and responsible party for various documents or items relevant to the sale of Texas Galvanizing and U.S. Galvanizing.

Thereafter, by letter dated January 8, 2008, FWT notified Haskin Wallace of the following By letter dated December 31, 2007, I advised you that FWT, Inc. had elected to exercise its right of first refusal in the Deed. FWT, Inc. is ready to consummate the closing of the exercise of the right of first refusal in the Deed. Please advise me of the closing date.

In response to this letter, counsel for Haskin Wallace sent a letter to FWT's counsel stating in part that "the exercise of the Option to Purchase by a holder of a Right of First Refusal must be positive, unconditional and unequivocal and must be exercised in strict compliance with the terms of the option" and that "FWT must accept all terms of the offer or the offer will be considered rejected." Counsel for Haskin Wallace thus proposed January 18, 2008, as a closing date and stated that his clients would expect to receive good funds totaling $16,500,000 for the assets of Texas Galvanizing and U.S. Galvanizing. No closing ever occurred.

Haskin Wallace sued FWT shortly thereafter, seeking a declaratory judgment that FWT's right of first refusal was extinguished or that FWT failed to materially comply with the right of first refusal and, therefore, waived the right. FWT answered and sought a declaration in its amended counterclaim that the right of first refusal contained in the Deed "pertains solely to the sale or lease of the Property"; that FWT properly exercised its right of first refusal in the Deed; and that FWT may lease the Property at a rate of $25,000 per month for five years, elect to renew the lease under the same terms for two additional five-year terms, and elect to purchase the Property for $2,500,000. FWT also sought specific performance of its right of first refusal in the Deed and pleaded that all conditions precedent to recovery on its claim for specific performance had been performed or have occurred.

Haskin Wallace filed a motion for summary judgment on its declaratory judgment action, citing two grounds: (1) FWT's right of first refusal was waived or extinguished because FWT failed to tender performance in conformity with the terms and conditions of the "Transaction," and (2) in order to appropriately exercise the right of first refusal, FWT was required to unequivocally accept all of the terms and conditions of the "Transaction." Haskin Wallace identified the "Transaction" as Valmont's acquisition of the assets of Texas Galvanizing and U.S. Galvanizing. FWT responded and specially excepted to parts of Haskin Wallace's motion. FWT also filed a motion for summary judgment, asserting that summary judgment was proper on its claim for a declaratory judgment because it properly exercised its right of first refusal in the Deed, which related solely to the Property, and that summary judgment was proper on its claim for specific performance. Haskin Wallace responded, to which FWT filed special exceptions and objections. The trial court denied FWT's motion for summary judgment, granted Haskin Wallace's motion for summary judgment, and overruled FWT's objections and special exceptions. FWT appeals.

III. STANDARD OF REVIEW

In a summary judgment case, the issue on appeal is whether the movant met the summary judgment burden by establishing that no genuine issue of material fact exists and that the movant is entitled to judgment as a matter of law. Tex.R. Civ. P. 166a(c); Sw. Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex.2002); City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex.1979). The burden of proof is on the movant, and all doubts about the existence of a genuine issue of material fact are resolved against the movant. Sw. Elec. Power Co., 73 S.W.3d at 215.

When reviewing a summary judgment, we take as true all evidence favorable to the nonmovant, and we indulge every reasonable inference and resolve any doubts in the nonmovant's favor. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex.2005). Evidence that favors the movant's position will not be considered unless it is uncontroverted. Great Am. Reserve Ins. Co. v. San Antonio Plumbing Supply Co., 391 S.W.2d 41, 47 (Tex.1965). But we must consider whether reasonable and fair-minded jurors could differ in their conclusions in light of all of the evidence presented. See Wal-Mart Stores, Inc. v. Spates, 186 S.W.3d 566, 568 (Tex.2006); City of Keller v. Wilson, 168 S.W.3d 802, 822-24 (Tex.2005). The summary judgment will be affirmed only if the record establishes that the movant has conclusively proved all essential elements...