Kellner v. Bartman

• Decision Date: 16 September 1993
• Docket Number: No. 4-93-0150,4-93-0150
• Citation: 189 Ill.Dec. 639,620 N.E.2d 607,250 Ill.App.3d 1030
• Parties: , 189 Ill.Dec. 639 Julie KELLNER, John Agee, Jr., and Jeffrey Agee, as Executors of the Estate of John P. Agee, Sr., and Betty A. Agee, Plaintiffs-Appellants, v. Ralph E. BARTMAN and Dolores Bartman, Defendants-Appellees.
• Court: United States Appellate Court of Illinois

Page 607

620 N.E.2d 607

250 Ill.App.3d 1030, 189 Ill.Dec. 639

Julie KELLNER, John Agee, Jr., and Jeffrey Agee, as Executors of the Estate of John P. Agee, Sr., and Betty A. Agee, Plaintiffs-Appellants, v. Ralph E. BARTMAN and Dolores Bartman, Defendants-Appellees.

No. 4-93-0150.

Appellate Court of Illinois,

Fourth District.

Sept. 16, 1993.

Charles L. McNeil, McNeil & McNeil, Mason City, for plaintiffs-appellants.

Roger W. Thompson, Lincoln, for defendants-appellees.

Justice McCULLOUGH delivered the opinion of the court:

John P. Agee, Sr., and Betty A. Agee (Agees) appealed from an order of the circuit court of Logan County granting a summary judgment to defendants, Ralph E. Bartman and Dolores Bartman. The Agees sued defendants for breach of a written contract in which defendants granted the Agees a right of first refusal on the sale of specified real estate. During the pendency of this appeal, a motion was filed to substitute Julie Kellner, John Agee, Jr., and Jeffrey Agee, as executors of the estate of John P. Agee, Sr., as appellants as a result of the death of John P. Agee, Sr. This motion was granted.

On appeal, the only issue is whether the trial court properly determined that no genuine issue of material fact existed and that the defendants were entitled to a judgment as a matter of law. We reverse.

On December 18, 1978, the Agees and Bartmans entered into an installment contract whereby the Bartmans agreed to sell and the Agees agreed to purchase the following described property:

"All of my real estate located in the Northeast Quarter (NE 1/4) of Section 31, Township 21 North, Range 4 West of the 3rd P.M. and that part of Section 32, Township 21 North, Range 4 West of the 3rd P.M. located west of the New Holland to San Jose blacktop road as presently situated, containing approximately 28 acres, more or less, situated in the Town of Prairie Creek, County of Logan and State of Illinois."

The sales price was $60,000, to be paid $1,000 upon execution of the agreement, $29,000 to be paid on or before February 1, 1979, and the remaining $30,000 to be paid in three $10,000 installments, together with 7% interest per annum on the unpaid balance calculated from February 1, 1979. The three installments were to be paid on or before February 1, 1980, February 1, 1981, and February 1, 1982. There was no dispute in this case that the conditions were fully performed and that the above described property was transferred by the Bartmans to the Agees in 1982.

However, also included in the installment contract was the following language:

"8. SPECIAL PROVISIONS:

(A) In the event Seller shall decide to sell his remaining farm land located in Section 32, Township 21 North, Range 4 West of the 3rd P.M., excepting, however, therefrom a 35[-]acre tract situated in the Southwest Quarter of said Section 32, situated in the Town of Prairie Creek, Logan County, Illinois, he shall first offer the farm land to Buyer for the price and on the terms of the intended sale, by an instrument in writing, delivered or mailed to Buyer at their above[-]stated address. Buyer shall have sixty (60) days from the date of such offer in which to accept or reject the same. Upon the expiration of such period, if the offer is not accepted by Buyer, Seller shall be free to sell said premises to such other prospective Buyer or Buyers. Acceptance of said offer by Buyer shall be in writing within the period of time provided to Seller delivered or mailed to Seller's address herein stated."

The contract further provided that all covenants and agreements therein "shall extend to and be obligatory upon the heirs, executors, administrators, and assigns of the respective parties." The contract was drafted by an attorney who represented the Bartmans.

On March 1, 1989, the Bartmans entered into an installment contract for the sale of farmland located in "Section 32, Township 21 North, Range 4 West of the Third Principal Meridian, Logan County, Illinois," to Donald and Barbara Semple (Semples). In doing so, the Bartmans did not offer to sell the property to the Agees. Donald and Barbara Semple are not parties to this proceeding.

In the trial court, the Agees and Bartmans both filed motions for summary judgment. The trial court denied the Agees' motion, but granted the Bartmans' motion. In granting summary judgment to the defendants, the trial court noted that over 10 years had expired from the date of the original contract to the date of the sale to Semples and over seven years had expired from the termination of the contract to the date of the sale to the Semples. In addition, the trial court found that paragraph 8(A) of the contract was vague and indefinite concerning price and other terms and absolutely quiet as to the element of time. The trial court further stated the calculation of damages would be "pure guesswork and speculation" and to extend the right of first refusal beyond the expiration of the original contract was neither intended nor reasonable. In denying the Agees' post-trial motion, the trial court further explained that not too much weight was given to the speculative nature of damages. The trial court was concerned with the indefiniteness as to time and the mode of computing the sale price.

Merely because the parties filed cross-motions for summary judgment alleging that no genuine issue of material fact existed does not obligate the trial court to grant summary judgment. Mutual Life Insurance Co. v. Washburn (1989), 183 Ill.App.3d 978, 981, 132 Ill.Dec. 472, 474, 539 N.E.2d 1278, 1280, rev'd on other grounds (1990), 137 Ill.2d 312, 148 Ill.Dec. 723, 561 N.E.2d 29.

"The purpose of summary judgment is to determine whether there are any genuine issues of material fact (Purtill v. Hess (1986), 111 Ill.2d 229, 240 [95 Ill.Dec. 305, 489 N.E.2d 867] ), and summary judgment should be granted when 'the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law' (Ill.Rev.Stat.1989, ch. 110, par. 2-1005(c)). Although summary judgment is an expeditious method of disposing of a lawsuit, it should only be allowed when the right of the moving party is clear and free from doubt. ( Purtill, 111 Ill.2d at 240 [95 Ill.Dec. 305, 489 N.E.2d 867].)" (Colvin v. Hobart Brothers (1993), 156 Ill.2d 166, 169-70, 189 Ill.Dec. 407, 409, 620 N.E.2d 375, 377.)

On appeal, the reviewing court's role is to consider anew the facts and law relating to the case and determine whether the trial court was correct in finding that no genuine issue of material fact existed, and if none exists, whether the judgment was correctly entered as a matter of law. University of Illinois v. Continental Casualty Co. (1992), 234 Ill.App.3d 340, 343, 175 Ill.Dec. 324, 327, 599 N.E.2d 1338, 1341.

"The interpretation of an unambiguous written contract is a question of law for the trial court to determine. Likewise, the determination of whether an ambiguity exists is also a question of law. (Nerone v. Boehler (1976), 34 Ill.App.3d 888, 340 N.E.2d 534.) Simply because the parties cannot agree on the meaning of a contract does not mean it is ambiguous. (Joseph v. Lake Michigan Mortgage Co. (1982), 106 Ill.App.3d 988 , 436 N.E.2d 663.) Even if the court determines there is an ambiguity and evidence of prior and contemporaneous transactions and other extrinsic facts are introduced to ascertain the contract's true meaning, the meaning of the contract may still be determined as a matter of law where the facts are uncontroverted or show the contract to have but one meaning. Nerone v. Boehler (1976), 34 Ill.App.3d 888, 340 N.E.2d 534." (Pasulka v. Koob (1988), 170 Ill.App.3d 191, 202, 121 Ill.Dec. 179, 186, 524 N.E.2d 1227, 1234.)

In this case, the facts are not controverted and the parties merely disagree about the legal effect of the language of the contract. As a result, with regard to the trial court's determination of the legal effect of the right of first refusal in the installment contract between the Agees and the Bartmans, there is no genuine issue of material fact.

All that remains to be determined is whether judgment was properly entered in favor of defendants as a matter of law. The first question to be addressed is whether the right of first refusal is unenforceable because it is insufficiently definite as to price and other terms. Had this been an option instead of the right of first refusal, the trial court's ruling would have been correct. An option is defined as:

"A right, which acts as a continuing offer, given for consideration, to purchase or lease property at an agreed upon price and terms, within a specified time. An option is an agreement which gives the optionee the power to accept an offer for a limited time. Kelman v. Bohi, 27 Ariz.App. 24, 550 P.2d 671, 675. An option to purchase or to sell is not a contract to purchase or sell, as optionee has the right to accept or to reject the offer, in accordance with its terms, and is not bound. Catmull v. Johnson, Utah, 541 P.2d 793, 795." (Black's Law Dictionary 986 (5th ed. 1979).)

A right of first refusal, also referred to as a preemptive right, is a condition precedent to the sale of the property. A right of first refusal is not an option in that the holder of the right cannot force the sale of the property at a stipulated price. (Annot., Landlord and Tenant: Tenant's Rights Under Provision Giving Him Pre-Emptive Right to Purchase on Terms Offered by Third Person, Where Third Person's Offer is Withdrawn Before Tenant Exercises Pre-Emptive Right, 46 A.L.R.3d 1377, 1377-78 (1972).) Instead, the right does not arise until the grantor notifies the holder of a desire to sell or until offering or contracting to sell to a third party without first giving the holder of the right of first refusal the opportunity to buy. (Wellmore Builders, Inc. v. Wannier (195...