Chad Atherton v. Jarred Sper
368977
| Mich. Ct. App. | Jun 3, 2025Background
- Plaintiffs (Atherton and Aronovich) purchased a home and 10 acres from the Spers, with a right of first refusal to purchase surrounding property.
- The Spers transferred 50 adjacent acres to Summit Court Holdings, LLC (owned by Jarred Sper) for $0, claiming it was for liability purposes.
- Summit then sold the 50 acres to Dreamers and Doers 3981, LLC (owned by Jarred, his brother Stephen, and Kyle Sischo) for $419,000, a price lower than previously discussed with plaintiffs.
- The land contract included a lease allowing Detach LLC to operate a campground on the property.
- Plaintiffs sued for breach of contract, seeking specific performance or damages, arguing their right of first refusal was violated.
- The trial court found there was no breach because the transaction was not an arm’s-length “sale,” and denied reconsideration; plaintiffs appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the right of first refusal was triggered by Summit's sale to Dreamers and Doers | Summit's transfer to Dreamers and Doers was a qualifying sale triggering their rights | The transfer was not an arm's-length sale and buyer was not a stranger; right was not triggered | Transfer for value, to entity not party to original contract, triggered the right of first refusal |
| Definition of "sale" under LaRose and related precedent | Applied four-factor test: for value, significant interest, stranger to contract, control gained | Required a bona fide, arm’s-length sale and a stranger as defined by relationship, not contract | "Sale" does not require arm’s-length; only value and transfer to stranger under contract |
| Who qualifies as a "stranger" to the purchase agreement | Dreamers and Doers, Stephen, and Kyle were strangers to original contract | Only parties unrelated to all contracting individuals/entities qualify as strangers | Strangers means not party to original contract, not based on personal relationship |
| Remedy for breach of the right of first refusal | Specific performance is the appropriate remedy | Unresolved at this stage (trial court to fashion remedy) | Remanded for trial court determination of appropriate remedy |
Key Cases Cited
- Randolph v. Reisig, 272 Mich App 331 (right of first refusal is a conditional option to purchase, dependent on owner's desire to sell)
- In re Smith Trust, 274 Mich App 283 (right of first refusal gives a preferential right on the same terms offered to a bona fide purchaser)
- LaRose Market, Inc. v. Sylvan Ctr, Inc., 209 Mich App 201 (definition of "sale" for rights of first refusal; laid out four-factor test)
- McDonald v. Farm Bureau Ins Co., 460 Mich 191 (standard of appellate review for equitable relief and legal effect of a contract)