Trear v. Chamberlain
| Decision Date | 13 January 2017 |
| Docket Number | No. 115,819,115,819 |
| Citation | 388 P.3d 607 |
| Parties | Kevin W. Trear, Appellant/Cross-appellee, v. Susan J. Chamberlain, Nathan Goodell, and Jamie Jasnoski, Appellees/Cross-appellants. |
| Court | Kansas Court of Appeals |
Stuart N. Symmonds and Robert N. Symmonds, of Symmonds & Symmonds, LLC, of Emporia, for appellant/cross-appellee.
Karen K. McIlvain, of McIlvain Law Office, LLC, of Madison, for appellees/cross-appellants.
Before Powell, P.J., Pierron and Hill, JJ.
The public policy in Kansas commands that land must not be tied up forever by ancient covenants. This policy is expressed in the common-law rule against perpetuities which nullifies any contractual provision that tries to control land forever. Aware of this, and wanting to avoid the harsh result of contract nullification, modern courts frequently interpret contracts to create personal interests in real estate that are unique to the contracting party. Such interests cannot be passed on to all future generations and, thus, cannot violate the rule against perpetuities. We interpret the right of refusal provision in the 1986 real estate contract between Kevin W. Trear and Leonard and Susan Chamberlain to be the personal right of Trear that cannot be passed on to anyone else.
Because the district court erroneously held that the rule against perpetuities nullified the right of refusal provision of the real estate contract, we reverse and remand for further proceedings. We do, however, hold that the district court properly ruled that the same contract did, in its "description of adjoining land," satisfy the statute of frauds. We affirm that portion of the district court's ruling.
We are in the same position as the district court.
Because there are no disputes about the facts, we are in the same position as the district court in ruling upon this motion for summary judgment. See Martin v. Naik , 297 Kan. 241, 246, 300 P.3d 625 (2013).
Trear bought some real estate from the Chamberlains in 1986 in Lyon County, Kansas. Trear was not represented by counsel and the Chamberlains' lawyer drafted the contract. The right of refusal provision that is at the heart of the controversy in this case states:
In addition, the contract provided that it was "binding upon the heirs, legal representatives, and assigns of the parties hereto."
Leonard Chamberlain died in 2013. Later that year, Susan wanted to sell the adjoining real estate, subject to the right of refusal provision. Chamberlain's lawyer wrote a letter to Trear containing an offer by Chamberlain to sell the property for $289,000. The letter stated that if Trear did not reply by November 12, 2013, it would be assumed Trear did not want to purchase the real estate and Chamberlain's obligation under the right of refusal provision would be fulfilled.
The property Chamberlain wanted to sell was a 73–acre tract that included the house in which the Chamberlains had lived. Offering self-serving statements in her affidavit in support of summary judgment, Chamberlain's daughter, Jamie Jasnoski, stated two companies had appraised the property. One set the value at $299,000 and the other company said the property was valued at $275,000. However, neither company had a file on the appraisal. Trear neither accepted the offer nor made any counteroffer. After that, Chamberlain listed the real estate with Tri–County Realty, which advertised the property for sale at $295,000. Tri–County Realty was unable to sell the property for the listed price. Trear never made an offer to Tri–County Realty to purchase the property.
Shortly after she took the property off the market, Chamberlain sold a 64–acre tract which did not include the house, to Jasnoski and Nathan Goodell for $91,125—a price considerably lower than that offered to Trear. When he learned of the sale, Trear sued Chamberlain, Goodell, and Jasnoski to enforce his right of refusal and to transfer the property to him instead. Chamberlain, Goodell, and Jasnoski filed a motion for summary judgment.
In its summary judgment ruling, the district court found that the right of refusal provision, when read in combination with the binding clause at the end of the contract, violated the rule against perpetuities. The district court refrained from reforming the contract under the provision in K.S.A. 59–3405(b) permitting the court to make such modifications because there was no petition before the court asking to modify the contract. Trear asked the judge whether he would deny a petition if one was presented and the judge stated:
The court went on to hold that the right of refusal provision did not violate the statute of frauds because the meaning of "adjoining property" in the contract could be ascertained. Both parties appealed the summary judgment rulings.
Because this contract was created before Kansas adopted the Uniform Statutory Rule Against Perpetuities, it does not apply to the future interest created by the contract in this case. See K.S.A. 59–3405(a). Instead, the common-law rule against perpetuities does apply. That means any interest which does not vest within 21 years after the termination of a life in being is void. Barnhart v. McKinney , 235 Kan. 511, 516–17, 682 P.2d 112 (1984).
Four cases offer us guidance .
Our view of this case is guided by what appears to be the clear evolution of the Supreme Court's application of the rule against perpetuities. We begin with an older case that ruled a contract violated the rule. The next three cases, all more recent, held the contracts did not violate the rule. They demonstrate the court's growing reluctance to void contracts.
Our Supreme Court expressly held that the language violated the rule against perpetuities because "the Buchanans and those holding under them, either as assignees or heirs, would hold a right to obtain an interest in the property running for an indefinite period of time." 103 Kan. at 424–25, 173 P. 1124. The Henderson court viewed the language "at any time in the future" to mean heirs and assignees could act under the right. The court also took issue with the $65 required sale price, because at the time of sale the land "may be worth $1,000 an acre." 103 Kan. at 424, 173 P. 1124.
The next cases all held that the contract provisions did not violate the rule against perpetuities. In Crawn v. French , 7 Kan.App.2d 672, 646 P.2d 1158 (1982), a panel of this court held that when a preemptive right is personal to the buyer, the rule against perpetuities is not violated. The provision read:
This court held that the contract language created a personal preemptive right in French and the preemptive right did not extend to French's heirs or assigns. 7 Kan.App.2d at 674–75, 646 P.2d 1158. Obviously, since that was a personal right, it would expire at French's death.
Next, in Barnhart , 235 Kan. 511, 682 P.2d 112, the court held a preemptive right did not violate the rule against perpetuities because the right was personal to the Barnharts, who were the sellers, and would vest at the latest upon the Barnharts' death. The language of that provision read:
" ‘Said 5 acres are to be retained by Sellers as a site for a house trailer with the understanding that when Sellers decide to sell or vacate said 5 acres they will first offer it to Purchasers at a price not to exceed $200.00 per acre plus the cost of any permanent improvements to the real estate that have a residual value.’ " 235 Kan. at 512, 682 P.2d 112.
It is important to note that in Barnhart , the court stated: "[A] ‘document should be interpreted where feasible to avoid the conclusion that it violates the rule against perpetuities.’ " 235 Kan. at 520, 682 P.2d 112 ; see Singer Company v. Makad, Inc. , 213 Kan. 725, Syl. ¶ 6, 518 P.2d 493 (1974). In applying this rule, the court interpreted the contract language " ‘to be retained by Sellers as a site for a house trailer’ " meant the burden of the preemptive right was personal to the sellers, and the Barnharts would necessarily " ...
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Trear v. Chamberlain
...A Court of Appeals panel reversed, disagreeing with the district court's rule-against-perpetuities decision. Trear v. Chamberlain , 53 Kan.App.2d 385, 391, 388 P.3d 607 (2017). It also held the first right of refusal clause was enforceable under the statute of frauds and agreed with the dis......