Gyurkey v. Babler

• Decision Date: 29 September 1982
• Docket Number: No. 13466,13466
• Citation: 103 Idaho 663,651 P.2d 928
• Parties: , 34 A.L.R.4th 1199 Nick F. GYURKEY, Plaintiff-Appellant, v. Lloyd BABLER, Jr., Thomas Babler, Raymond A. Town, Jr., dba Western International Investors & Development Co., a partnership; and David Barovetto, James Ruscitto, III, individually and also dba Low Profile Architecture, a partnership; and Terry Cox, Defendants-Respondents.
• Court: Idaho Supreme Court

Page 928

651 P.2d 928

103 Idaho 663, 34 A.L.R.4th 1199

Nick F. GYURKEY, Plaintiff-Appellant, v. Lloyd BABLER, Jr., Thomas Babler, Raymond A. Town, Jr., dba Western International Investors & Development Co., a partnership; and David Barovetto, James Ruscitto, III, individually and also dba Low Profile Architecture, a partnership; and Terry Cox, Defendants-Respondents.

No. 13466.

Supreme Court of Idaho.

Sept. 29, 1982.

Daniel A. Slavin, Twin Falls, for plaintiff-appellant

Terry G. Hogue, Ketchum, for defendants-respondents Babler, Babler and Town, dba Western International Investors & Development Co.

Lawrence J. Young, Ketchum, for defendants-respondents Cox, Ruscitto and Barovetto.

BAKES, Chief Justice.

I FACTS

Plaintiff appellant Gyurkey brought suit to enforce a right of first refusal to purchase real property in Ketchum, Idaho. Following the presentation of the plaintiff's evidence, the district court dismissed plaintiff's claims pursuant to I.R.C.P. 41(b). Gyurkey now appeals that decision.

In May, 1977, Western International Investors and Development Company, a partnership comprised of Lloyd Babler, Jr., Thomas Babler and Raymond Town [hereinafter Babler], owned eight lots in a subdivision located at the foot of Warm Springs Run, Ketchum, Idaho. These lots were known and designated as Lots 7 through 14, Block 1, Warm Springs Village Subdivision, 2d Addition Revised, Ketchum, Idaho. Lots 8 through 14 were listed for sale by Babler with the Ketchum real estate firm of Capik, Carr & Gillis during 1977. Phil Gillis of the firm acted as agent for Babler.

On May 11, 1977, plaintiff Gyurkey purchased Lot 14 of the subdivision for $27,777. Lot 14 is contiguous to the Lift Haven Inn, previously purchased by Gyurkey. The purchases of the inn and Lot 14 were effected Following negotiations on February 2, 1978, Babler signed an earnest money agreement presented by defendant respondents Cox, Ruscitto, and Barovetto. Under the terms of the agreement, the three were to receive Lots 8 through 13 in exchange for building on Lot 7 a house for Babler having a value of $204,000, less real estate commissions and $6,000 received as earnest money. During negotiations leading up to the agreement, Babler informed Barovetto about the right of first refusal which Gyurkey held on Lot 13. Barovetto was also told that Babler would have to place a fair market value on Lot 13 in order to give Gyurkey an opportunity to exercise his right of first refusal. Consequently, the agreement between Babler, Cox, Ruscitto and Barovetto provided that Lots 8 and 13 were valued at $50,000 each, and that Lots 9 through 12 were valued at $26,000 each. The listing agreement for the properties, dated May 20, 1977, had stated a selling price of $30,000 cash net for each of Lots 9 through 13, and $32,500 cash net for Lot 8. Also, Babler admitted at trial that the January, 1978, earnest money agreement was the first time that any of lots 9 through 13 had been listed at substantially different prices. It was agreed between Babler and the purchasers that should Gyurkey exercise his right of first refusal and purchase Lot 13 for $50,000, the money received by Babler from Gyurkey would be used in the construction of the residence for Babler.

                in behalf of Gyurkey by Thomas Curran, a real estate broker and owner of Bitteroot Realty.  Curran prepared, at the direction of Gyurkey, the purchase/sale agreement for Lot 14.  At Gyurkey's request, Curran included a right of first refusal on the adjoining Lot 13, stating as follows:  "Seller agrees to give the buyer a first right of refusal on Lot No. 13, and buyer will have five (5) business days to meet any other offer on the same terms and conditions."   The agreement was submitted to Gillis and subsequently accepted by Babler on May 24, 1977.  Between May and December, 1977, Gyurkey made two offers to purchase Lot 13 from Babler, one for $27,770 and one for $33,000.  Both offers were submitted by Curran through Gillis and rejected by Babler
                

Immediately following Babler's acceptance of the Cox offer on February 2, 1978, Gillis called Bitteroot Realty for the purpose of informing Gyurkey that he had five days in which to exercise his right of first refusal to purchase Lot 13 for $50,000. Curran was out of town, so Gillis spoke with Millington, a real estate salesman at Bitteroot Realty. Millington took the message, and placed a call to Gyurkey's residence. Gyurkey was not at home, and Millington left a message with Gyurkey's answering service indicating that there was a pending sale of Lot 13 for $50,000 and that Gyurkey had five days in which to exercise his right of first refusal. Millington also asked Judy Campbell, a secretary at Bitteroot Realty, if she would relate the information to Gyurkey, knowing that Campbell had been seeing Gyurkey. Campbell telephoned Gillis to confirm the existence of the pending sale and related that information to Gyurkey that evening. Gyurkey admitted receiving both messages.

After receiving the information on the pending sale, Gyurkey approached an adjoining property owner concerning a joint purchase of Lot 13. The adjoining property owner indicated that he was not interested, and Gyurkey then told Curran of Bitteroot Realty that he was unable to exercise his right of first refusal because of insufficient funds. Thereafter Curran called Gillis on or about February 7, 1978, and informed him that Gyurkey was not going to exercise his right of refusal. This information was in turn relayed to respondents.

During March, April and May of 1978, Curran, on behalf of Gyurkey, periodically called Gillis to inquire whether the Cox-Babler exchange had been culminated. In May of 1978, Curran requested on behalf of Gyurkey, copies of the Cox-Babler earnest money agreement. That document was delivered to Curran who transmitted it to Gyurkey. Construction on the home began in July, 1978. Also, on July 4, 1978, a release agreement was executed between Babler, Cox, Barovetto and Ruscitto, and Following the presentation of plaintiff's case, the court ruled against Gyurkey finding that the $50,000 purchase price had been determined by Babler in good faith, that Bitteroot Realty was plaintiff's agent with respect to the purchase of Lot 13, and that notice of the pending sale had properly been given to Bitteroot Realty, and that in any event plaintiff had actual notice of the pending sale of Lot 13. Consequently, the trial court found that Gyurkey had been given the opportunity to exercise his right of first refusal and had failed to do so.

                provided for the transfer of one lot per every $30,000 in labor and materials actually expended on the residence.  The agreement stated that it was to "serve as a contract for [the] property exchange."   From the record in this case, it appears that Lot 13 has not yet been transferred.  Later in July Gyurkey filed suit against the respondents alleging that he had not been notified of any bona fide offer for the purchase of Lot 13, and that the conveyance of Lot 13 "was and is in fraud of [his] rights under his first right of refusal."   As relief, Gyurkey requested "an opportunity to purchase said real property for the sum of $30,000 in accordance with the right of first refusal held by plaintiff."
                

On appeal Gyurkey argues that the notice he received concerning the pending sale was insufficient to require him to exercise or else lose his preemptive right to purchase Lot 13. Additionally, it is asserted that the agreement between the respondents essentially provided for the sale of Lot 13 at the price of $30,000, and that appellant is entitled to purchase Lot 13 at that price pursuant to his right of first refusal.

II NOTICE

Concerning the question of notice, we think the record is clear that, notwithstanding an asserted lack of agency on the part of Bitteroot Realty employees, the appellant received actual knowledge of the contents of Babler's communication to Bitteroot Realty in regard to the sale of Lot 13. The question thus becomes whether that communication by Babler of itself was sufficient to require a decision by Gyurkey as to whether he would exercise his right of first refusal. We hold that it was not.

It is a basic principle of contract law that, in order to create a contract, an acceptance must be unconditional, identical to the offer, and must not modify, delete or introduce any new terms into the offer. Turner v. Mendenhall, 95 Idaho 426, 510 P.2d 490 (1973); C. H. Leavell & Co. v. Grafe & Assoc., Inc., 90 Idaho 502, 414 P.2d 873 (1966). The same principle applies to rights of first refusal. Where such a preemptive right to purchase is based upon the preemptor's meeting the same terms and conditions of a third party's offer which the seller intends to accept, the outstanding offer becomes in essence the seller's offer to the preemptor by operation of the right of first refusal, and in order to accept that offer, the preemptor must fully meet the terms and conditions of the offer in his acceptance. See Sports Premiums, Inc. v. Kaemmer, 595 P.2d 696 (Colo.App.1979); Duane Sales, Inc. v. Carmel, 49 N.Y.2d 862, 427 N.Y.S.2d 930, 405 N.E.2d 175 (1980). It necessarily follows as a corollary to that rule that the holder of such a right of first refusal cannot be called upon to exercise or lose that right unless the entire offer is communicated to him in such a form as to enable him to evaluate it and make a decision. In most transactions, as is the case here, the seller receives a written offer to purchase setting forth the terms and conditions of the offer. The preemptor, under a right of first refusal requiring acceptance on the same terms and conditions, is entitled to no lesser means of receiving the offer than is provided to the seller by the third party offeror.

In the present case Gyurkey was never presented with the full terms of the offer submitted by respondents Cox, Barovetto and Ruscitto, and likewise never received the...