Nora A. Mulberry, & TN Props. LLC v. Burns Concrete, Inc.
| Decision Date | 21 February 2019 |
| Docket Number | Docket No. 45184 |
| Citation | 435 P.3d 509,164 Idaho 729 |
| Court | Idaho Supreme Court |
| Parties | Nora A. MULBERRY, and TN Properties LLC, Plaintiffs-Respondents, v. BURNS CONCRETE, INC., and Canyon Cove Development Company, LLP, Defendants-Appellants. |
Parsons Behle & Latimer Boise, for appellant. Robert B. Burns argued.
Carey Romankiw, PLLC, Idaho Falls, for respondents. Donald F. Carey argued.
Burns Concrete, Inc., and Canyon Cove Development Company, LLP, (Canyon Cove), appeal the Bonneville County district court's judgment in favor of Nora Mulberry and TN Properties, LLC, (collectively Mulberry) regarding the extinguishment of a right of first refusal (ROFR). In 1999, Nora and Theodore Mulberry sold a piece of real property (Purchased Property) to Canyon Cove and included a ROFR to a nearby, distinct parcel of real property (ROFR Property). Twelve days later, Canyon Cove conveyed its interest in both the Purchased Property and the ROFR to Burns Concrete and recorded the deed to the purchased property with the Bonneville County Recorder. In 2005, Nora Mulberry and her now deceased husband conveyed the ROFR Property to their wholly owned limited liability company, TN Properties, and subsequently recorded the deed with the Bonneville County Recorder. In 2016, Mulberry filed a complaint seeking declaratory judgment and subsequently a motion for partial summary judgment. The district court entered partial summary judgment in favor of Mulberry finding the ROFR was personal to Mulberry and Canyon Cove, and it was subsequently extinguished when Canyon Cove assigned it to Burns Concrete. On reconsideration, the district court held that the ROFR was a servitude appurtenant to the Purchased Property, and reaffirmed it was extinguished by Canyon Cove's conveyance to Burns Concrete. Burns Concrete and Canyon Cove timely appealed, and we vacate and remand.
On January 26, 1999, the Mulberrys sold land to Canyon Cove under a Commercial Investment Real Estate Purchase and Sale Agreement (PSA). At closing on March 18, 1999, the parties executed an addendum to the PSA which clarified the PSA's terms. A ROFR for a second parcel of land owned by the Mulberrys, separate from that parcel sold to Canyon Cove, was executed at the same time. The ROFR provided:
Approximately two weeks after closing, on March 30, 1999, Canyon Cove assigned the Purchased Property and its interest in the ROFR to Burns Concrete. In 2005, the Mulberrys conveyed the ROFR Property to TN Properties. Nora Mulberry is now the sole owner of TN Properties as Theodore Mulberry passed away sometime after the transfer.
In June 2016, Mulberry filed a verified complaint seeking declaratory judgment and later filed a motion for partial summary judgment on August 22, 2016. Mulberry sought a declaratory judgment that the ROFR was "personal to the parties" and not binding on Theodore and Nora Mulberry's "heirs, successors, devisees, or assigns, nor can it benefit Burns Concrete." On November 10, 2016, the district court entered a memorandum decision and order declaring the ROFR personal to the Mulberrys and Canyon Cove and finding that the ROFR was extinguished when Canyon Cove assigned it to Burns Concrete. The Memorandum Decision and Order also declared that the ROFR was not binding on the Mulberrys' heirs, successors, devisees, or assigns.
On December 30, 2016, Burns Concrete and Canyon Cove filed a motion for reconsideration. On March 20, 2017, the district court denied the motion. The district court stated that Canyon Cove's rights under the ROFR were extinguished because the ROFR was personal in nature, and because the ROFR was a servitude appurtenant to the Purchased Property and Canyon Cove no longer had an interest in the Purchased Property after conveying it to Burns Concrete.
On April 27, 2017, the district court dismissed the rest of Mulberry's claims as moot. In July 2017, the district court awarded Mulberry $ 11,447.50 in attorney fees and costs. Burns Concrete and Canyon Cove timely appealed.
"When reviewing a grant of summary judgment, this Court employs the same standard as the district court." Idaho Youth Ranch, Inc. v. Ada Cnty. Bd. of Equalization , 157 Idaho 180, 182, 335 P.3d 25, 27 (2014). Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." I.R.C.P. 56(a). "Disputed facts should be construed in favor of the non-moving party, and all reasonable inferences that can be drawn from the record are to be drawn in favor of the nonmoving party." Fuller v. Callister , 150 Idaho 848, 851, 252 P.3d 1266, 1269 (2011) (quoting Castorena v. Gen. Elec. , 149 Idaho 609, 613, 238 P.3d 209, 213 (2010) ). "However, the nonmoving party cannot rely on mere speculation, and a scintilla of evidence is insufficient to create a genuine issue of material fact." Intermountain Real Props., LLC v. Draw , LLC, 155 Idaho 313, 316–17, 311 P.3d 734, 737–38 (2013) (quoting Bollinger v. Fall River Rural Elec. Co-op., Inc., 152 Idaho 632, 637, 272 P.3d 1263, 1268 (2012) ).
Taylor v. Taylor , 163 Idaho 910, 915–16, 422 P.3d 1116, 1121–22 (2018).
Shea v. Kevic Corp. , 156 Idaho 540, 545, 328 P.3d 520, 525 (2014) (quotations and citation omitted).
This case involves a ROFR and whether the ROFR was extinguished when Canyon Cove purported to assign the ROFR, as well as convey the Purchased Property, to Burns Concrete. The district court determined the ROFR was On reconsideration, the district court concluded that the ROFR was personal, but also held that it was an appurtenant servitude to the Purchased Property, and thus was extinguished when Canyon Cove assigned the ROFR and Purchased Property to Burns Concrete. For the reasons discussed below, the district court properly found the ROFR was personal to Canyon Cove, and thus non-assignable to Burns Concrete. However, Canyon Cove's assignment to Burns Concrete did not extinguish the ROFR as to Canyon Cove. Accordingly, the district court's determination that the ROFR was extinguished is vacated.
This Court has not yet decided when a ROFR is personal and non-assignable. However, this Court's cases dealing with ROFRs have generally applied contract principles. We have said, "[a] preemptive right of first refusal is a legitimate contractual right." Meridian Bowling Lanes, Inc. v. Meridian Athletic Ass'n, Inc. , 105 Idaho 509, 511, 670 P.2d 1294, 1296 (1983) ; see also Gyurkey v. Babler , 103 Idaho 663, 671, 651 P.2d 928, 936 (1982) (). As to assignability, this Court has held that "[g]enerally, all contract rights which are not ‘personal’ in nature may be assigned." Sinclair Mktg., Inc. v. Siepert , 107 Idaho 1000, 1002, 695 P.2d 385, 387 (1985) (quoting Williston on Contracts 3d ed. § 412). Thus, it follows that whether the ROFR was assignable depends on whether it was "personal" in nature. See id.
While this Court has not yet articulated when a ROFR is personal, secondary sources addressing ROFRs suggest that they are presumed to be personal absent clear language that they are assignable to successors or assigns.
Rights of first refusal are presumed to be personal, and are thus not assignable unless either the clause granting the right refers to successors or assigns or the instrument clearly shows that the right was intended to be assignable. A right of first refusal to purchase real property is not assignable if the right does not run with the land but is personal to the grantee.
Contracts that involve personal services, a special confidence, or the like, so as to make them nonassignable, include ... the right of first refusal, unless the particular clause granting the right refers to successors or assigns or the instrument otherwise shows that the right was intended to be transferable or assignable.
6 Am. Jur. 2d Assignments § 28.
Thus, the applicable Corpus Juris Secundum and American Jurisprudence sections have stated that ROFRs are presumptively personal, absent language to the contrary such as language referencing "successors or assigns." 6 Am. Jur. 2d Assignments § 28. We applied similar reasoning in...
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