Meridian Bowling Lanes, Inc. v. Meridian Athletic Ass'n, Inc.

• Decision Date: 12 October 1983
• Docket Number: No. 14033,14033
• Citation: 670 P.2d 1294,105 Idaho 509
• Parties: MERIDIAN BOWLING LANES, INC. An Idaho Corporation, Plaintiff-Counter-Defendant-Appellant, v. MERIDIAN ATHLETIC ASSOCIATION, INC., An Idaho Non-Profit Corporation, Defendant-Cross-Defendant-Counter-Claimant-Respondent, Cross-Respondent, and Hepper Homes, Inc., An Idaho Corporation, Defendant-Counter-Claimant-Cross-Claimant, Respondent, Cross-Appellant.
• Court: Idaho Supreme Court

Page 1294

670 P.2d 1294

105 Idaho 509

MERIDIAN BOWLING LANES, INC. An Idaho Corporation, Plaintiff-Counter-Defendant-Appellant, v. MERIDIAN ATHLETIC ASSOCIATION, INC., An Idaho Non-Profit Corporation, Defendant-Cross-Defendant-Counter-Claimant-Respondent, Cross-Respondent, and Hepper Homes, Inc., An Idaho Corporation, Defendant-Counter-Claimant-Cross-Claimant, Respondent, Cross-Appellant.

No. 14033.

Supreme Court of Idaho.

Oct. 12, 1983.

F. Michael Burkett, Jr., of Park & Meuleman, Chartered, Boise, for Meridian Bowling Lanes, Inc.

Cumer L. Green, and Willis E. Sullivan III, of Green & Sullivan, Boise, for Meridian Athletic Ass'n.

Fredric V. Shoemaker, and Christopher Burke, of Clemons, Cosho & Humphrey, Boise, for Hepper Homes, Inc.

DONALDSON, Chief Justice.

In 1959 plaintiff-appellant, Meridian Bowling Lanes, Inc. (MBL), purchased a parcel of land from defendant-respondent, Meridian Athletic Association, Inc. (MAA) upon which MBL built bowling lanes. MAA retained ownership of land contiguous to the MBL property. With the permission of MAA, MBL established a small dirt roadway across a corner of MAA's property for additional access to the MBL's parking lot. In April 1974, MBL purchased from MAA an additional strip of land from the remaining MAA property. At approximately the same time, MAA orally granted to MBL a right of first refusal on the remaining MAA property, permission to use the roadway across MAA's property and permission to erect a business sign on MAA's property.

On January 4, 1977, MAA received an offer to purchase its remaining property from third parties by way of a signed earnest money agreement. MAA submitted a counter-proposal which was orally accepted by the third parties. This agreement was sent to MBL's president, Mr. Gene Quintieri, with a cover letter stating that the offer was submitted pursuant to MBL's right of first refusal and requesting a response within three days. In deposition testimony, Mr. Quintieri stated that he called MAA's attorney and requested further explanation of the terms of the offer which further explanation was promised. He further testified that he received no response from MAA. The third parties did not purchase the property.

In May 1978, defendant-respondent, cross-claimant, Hepper Homes, Inc. (HH) offered to buy the property. MAA accepted their offer without forwarding the offer to MBL. A condition of the sale which was consummated on August 21, 1978, was that the roadway and sign be removed from the property. On May 3, 1979, MAA's attorney wrote to MBL that HH wanted the road and sign removed. Subsequently MAA closed the road.

MBL brought suit seeking to enforce its right of first refusal or for an award of damages resulting from MAA's breach of the contract with respect to the right of first refusal. Summary judgment was granted in favor of MAA filed December 15, 1980, and later in favor of HH filed April 22, 1981. HH and MAA had filed cross-claims which were dismissed in a judgment filed April 22, 1981. MBL appeals from the judgments granted in favor of MAA and HH. We reverse. HH appeals from the judgment dismissing its cross-claim. Because of the resolution of the principal appeal between MBL and the respondents MAA and HH, the appeal of HH is premature.

Before we address the main issues of this case, we will consider and dispose of a procedural question--whether or not MBL's notice of appeal was prematurely filed. In order to consider this question, the following chronology is important:

October 28, 1980: Memorandum Decision granting summary judgment in favor of MAA filed,

December 9, 1980: Court Minutes reflect that summary judgment granted in favor of HH,

December 15, 1980: Findings of Fact and Conclusions of Law with respect to the granting of MAA's motion for summary judgment filed,

December 15, 1980: Judgment in favor of MAA on its motion for summary judgment against MBL filed December 30, 1980: Findings of Fact and Conclusions of Law and Decision with respect to the granting of HH's motion for summary judgment filed ("Counsel for Hepper shall prepare a proposed form of judgment and memorandum of costs consistent with the foregoing"),

January 15, 1981: Memorandum Decision and Order with respect to the cross-motions for summary judgment by MAA and HH filed,

January 20, 1981: Notice of Appeal against the respondents MAA and HH from the judgment filed December 15, 1980, filed,

January 30, 1981: Order denying cross-motions for summary judgment by MAA and HH filed,

April 22, 1981: Judgment in favor of HH on its motion for summary judgment against MBL filed, and

April 22, 1981: Judgment re: Attorney Fees/HH v. MAA filed which denied cross-motions for summary judgment and dismissed the remaining claims.

MBL's Notice of Appeal filed on January 20, 1981, was premature as it was from an I.R.C.P. 54(b) judgment and it was not certified as appealable under that rule. However, in the interests of judicial economy and being cognizant of amended I.A.R. 17(e)(2) (effective July 1, 1983), ¹ we conclude that the filing on April 22, 1981, of the two formal judgments which disposed of the remaining claims cured the defect as of that date. Except for the formal written judgments entered April 22, 1981, all claims involved in the case were resolved prior to the January 20, 1981, Notice of Appeal.

This case involves an alleged right of first refusal which would apply to the land sold by MAA to HH. A preemptive right of first refusal is a legitimate contractual right. See Garmo v. Clanton, 97 Idaho 696, 699, 551 P.2d 1332, 1335 (1976) (held a preemptive right of first refusal agreement to be enforceable must provide for a definite price or for a means of determining the price). The record discloses that the terms of the right are disputed. ² MBL asserts that the right required that MAA if it were willing to accept a bona fide third-party offer to purchase that MAA would provide MBL notice of that offer and an opportunity to purchase at those terms. MBL asserts that the right was to apply to all bona fide offers until the property was ultimately sold either to MBL or following a rejection of a particular offer by MBL to the party making the offer which MBL rejected. On the other hand, MAA contends that the right applied only to a single bona fide offer and that the right would evaporate if MBL rejected that one offer. The terms of the agreement present genuine issues of material fact which preclude the grant of summary judgment as a matter of law. The depositions in the record adequately support this conclusion.

Argument was also presented that a continuing right of first refusal would violate I.C. § 55-111. We disagree. While Garmo v. Clanton, 97 Idaho 696, 699 n. 3, 551 P.2d 1332, 1335 (1976), noted that it did not consider the applicability of I.C. § 55-111 (prohibition against suspension of the power of alienation), we hold that a preemptive right of first refusal at the owner's own price or a third-parties' bona fide offer which the owner is willing to accept does not suspend the absolute power of alienation of real property, I.C. § 55-111. See Watergate Corporation v. Reagan, 321 So.2d 133 (Fla.Dist.Ct.App.1975); cf. 6 American Law of Property, § 26.67, at 511 (1952) ("[A] pre-emption [at offeror's own price] cannot be void for remoteness, nor does it effect a restraint upon alienation. Even though the pre-emption is unlimited in duration, it should be valid if it requires merely an offer at the offeror's own price"). Further,

"[a] right to a 'first refusal' of certain property is not made unenforceable by the mere fact that no price is fixed in the agreement at which the owner must offer the property before selling to any other person. Before accepting a bona fide offer of a third person, the owner must give the plaintiff an opportunity to buy at the price so offered." 5 A Corbin on Contracts, § 1174 at 289 (1964) (footnote omitted); see Garmo v. Clanton, 97 Idaho 696, 699, 551 P.2d 1332, 1335 (1976); Annot., 136 ALR 138 (1942).

Regardless of whether the right of first refusal was limited to a single bona fide offer or was continuing in nature, the question remains whether MBL waived its right when it did not accept the first offer communicated to it by MAA.

"A waiver is the intentional relinquishment of a known right. It is a voluntary act and implies election by a party to dispense with something of value or to forego some right or advantage which he might at his option have demanded and insisted upon." Crouch v. Bischoff, 78 Idaho 364, 368, 304 P.2d 646, 649 (1956) (quoted approvingly in Grover v. Idaho Public Utilities Commission, 83 Idaho 351, 357, 364 P.2d 167, 171 (1961)).

After an examination of the record, we conclude that whether there was an expressed or implied waiver is clearly disputed.

"In order to establish a[n implied] waiver the intention to waive must clearly appear, and a waiver ... will not be presumed or implied contrary to the intention of the party whose rights would be injuriously affected thereby unless by his conduct the opposite party was misled to his prejudice into the honest belief that such waiver was intended or consented to." Smith v. Faris-Kesl Construction Co., Ltd., 27 Idaho 407, 429, 150 P. 25, 32 (1915) (quoted approvingly in Grover v. Idaho Public Utilities Commission, supra [83 Idaho], at 357-58, 364 P.2d at 171).

Deposition testimony of MBL's president at the motion for summary judgment level must be considered as truthful. See, e.g., Smith v. Boise Kenworth Sales, Inc., 102 Idaho 63, 625 P.2d 417 (1981). Mr. Quintieri testified that when MBL received notice of the first offer that MBL requested further explanation of the terms which was not provided. This testimony is sufficient to reveal a genuine issue with respect to waiver.

When a trial judge passes upon a motion for summary judgment and when this Court reviews the grant of a motion for summary judgment, the standard is the same--all facts...