ABCDW LLC v. Banning, 388 P.3d 821

Landlords leased land to Banning under a fixed-term Banning Lease ending January 2011, with a right of first refusal if renewed beyond five years.
Banning planted substantial alfalfa crops in 2009–2010, before Landlords confirmed renewal prospects.
Landlords informed in November 2010 they would not renew; a third-party offer from Double Anchor Farms emerged at $275/acre.
Banning declined the ROFR at $275/acre and Landlords provided a signed Double Anchor Lease for 2011–2012 at $275/acre; Banning did not exercise ROFR.
Banning later disced/destroyed the existing alfalfa and plowed irrigation borders; Landlords renegotiated rent to $125/acre; litigation ensued on ownership of alfalfa and related claims.
The trial court ruled alfalfa fixtures owned by Landlords, granted summary judgment on several claims for Landlords, and the jury awarded damages to both sides; the court also awarded Landlords attorneys’ fees to prevailing party.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Ownership of the alfalfa plants	Banning owned the alfalfa crops; alfalfa plants were not fixtures.	Alfalfa plants were fixtures belonging to Landlords under the lease.	Alfalfa plants were fixtures that belonged to Landlords; destruction violated the lease.
Applicability of AR.S. § 3-114	Statute does not apply to alfalfa under these facts.	Statute applies to commercial crops, including alfalfa.	Section 3-114 applies to commercial crops like alfalfa; destruction constitutes statutory damages.
Intentional interference with contract	Banning interfered with Landlords’ contract with Double Anchor Farms.	No improper interference; actions were justified to protect interests.	Landlords entitled to summary judgment on intentional interference with contract.
Right of first refusal and waiver	Banning’s ROFR was triggered; Landlords had to offer under the ROFR terms.	Banning breached by destroying alfalfa; ROFR became unavailable.	Banning’s counterclaims failed; Landlords entitled to judgment on ROFR and related covenant claims.
Implied covenant of good faith and fair dealing	Landlords violated the covenant by forcing Banning to bear cost for his own alfalfa to exercise ROFR.	No impairment of expected benefits; Banning did not own alfalfa.	Court held Landlords did not impair a right Banning reasonably expected; covenant not violated.

Mattis v. St. Louis & S.F. Ry. Co., 138 Mo.App. 61, 119 S.W. 998 (Mo. App. 1909) (distinguishing perennial plant vs. crop ownership)
First Wisconsin Nat. Bank of Milwaukee v. Fed. Land Bank of St. Paul, 849 F.2d 284 (7th Cir. 1988) (plants can become fixtures to realty)
Andersen v. Bureau of Indian Affairs, 764 F.2d 1344 (9th Cir. 1985) (emblements vs away-going crops; fixture considerations)
Triggs v. Kahn, 167 A.D.2d 680, 563 N.Y.S.2d 262 (N.Y. 1990) (away-going crops doctrine for perennial plants)
Lewis v. Lewis Nursery, Inc., 342 S.E.2d 45 (N.C. App. 1986) (nursery stock not fixtures where removal expected)
First Wisconsin Nat. Bank of Milwaukee v. Fed. Land Bank of St. Paul, 849 F.2d 284 (7th Cir. 1988) (perennial plants may be fixtures)
Staub v. Muller, 60 P.2d 283 (Cal. 1936) (alfalfa perennial; fixture considerations)
McDonald, State v., 88 Ariz. 1, 352 P.2d 343 (1960) (bona fide offer standards context)
Wagenseller v. Scottsdale Memorial Hospital, 147 Ariz. 370, 710 P.2d 1025 (1986) (intentional interference framework)
Uno Restaurants, Inc. v. Boston Kenmore Realty Corp., 441 Mass. 376, 805 N.E.2d 957 (2004) (bona fide offer standard for ROFR)
Phipps v. CW Leasing, Inc., 186 Ariz. 397, 923 P.2d 863 (App. 1996) (ROFR strict compliance)
Martinesi v. Tidmore, 158 Ariz. 53, 760 P.2d 1102 (App. 1988) (definition of ROFR)