Krieger v. Cornelius

• Decision Date: 04 November 1999
• Citation: 697 N.Y.S.2d 766,259 A.D.2d 10
• Parties: A. MICHAEL KRIEGER, Appellant,<BR>v.<BR>VICTOR CORNELIUS, Respondent, et al., Defendant.
• Court: New York Supreme Court — Appellate Division

259 A.D.2d 10

697 N.Y.S.2d 766

A. MICHAEL KRIEGER, Appellant,

v.VICTOR CORNELIUS, Respondent, et al., Defendant.

PETERS, J.

November 4, 1999.

William J. Better, Kinderhook, for appellant.

Gersen, Wood & Blakeman, L. L. P., New York City (Stanley M. Ackert, III, of counsel), New York City, for respondent.

MERCURE, J. P., CREW III, SPAIN and GRAFFEO, JJ., concur.

OPINION OF THE COURT

PETERS, J.

In July 1988, defendant Victor Cornelius (hereinafter defendant) became the sole owner of a parcel of real property known as "Teviotdale", a large historic home located in the Town of Livingston, Columbia County. Subject to a mortgage foreclosure proceeding by August 1991, defendant was receptive to plaintiff's unsolicited inquiry about its availability. An agreement was ultimately reached on September 10, 1991 wherein plaintiff purchased a one-half interest in the property for $300,000 pursuant to a joint tenancy agreement which specified that for the next four years, they were to share the property 10 months per year and that each would have sole use thereof for one month. Defendant was also granted, and did ultimately exercise, the right to buy plaintiff's share of the property within three months after the fourth anniversary of the closing. The agreement further provided, inter alia, as follows: "Should either party purchase the entire property and within twenty years thereafter offer it for sale, the other party has the option to purchase the property for $800,000.00 plus a sum reflecting the benefit of any capital improvements made subsequent to the buyout." This action addresses whether the above provision created an option to purchase, triggered when the property was listed for sale in August 1997 with a real estate broker,^[*] or a right of first refusal as determined by Supreme Court upon a preanswer motion to dismiss.

A right of first refusal binds a party who wishes to sell property not to do so without first giving another the opportunity to purchase such property at a specified price (see, LIN Broadcasting Corp. v Metromedia, Inc., 74 NY2d 54, 60; Metropolitan Transp. Auth. v Bruken Realty Corp., 67 NY2d 156, 163). As distinguished from an option "which creates a power to compel a sale, a first refusal right `contemplates a willing seller who desires to part with the property'" (Bloomer v Phillips, 164 AD2d 52, 54, quoting LIN Broadcasting Corp. v Metromedia, Inc., supra, at 60).

We agree with Supreme Court that, when viewed in its entirety, this agreement clearly reflects that the intent of these parties was to prevent a sale to a third party without giving the other signatory the...