Ryan v. Lawyers Title Insurance Corp.
959 N.E.2d 870
Ind. Ct. App.2011Background
- In 1972, the Keens sold the Ryan Property to the Ryans under a Purchase Agreement that included a right of first refusal if the Keens sold the Keen Property.
- Mary Keen died in 2006; her estate later sold the Keen Property to the Hagemans in December 2006 after probate proceedings.
- The Ryans filed suit in 2008 for specific performance, asserting they had a right of first refusal to purchase the Keen Property if the Keens elected to sell.
- The Estate and third parties (Agri-Town and Land America) contended the title search and insurance did not reveal the Ryans’ asserted right; third-party counterclaims were filed.
- Lawyers Title (the title underwriter) was substituted in 2009 for Land America, and both sides moved for summary judgment in 2009.
- In December 2010, the trial court granted summary judgment for Lawyers Title and Agri-Town, holding the right of first refusal was personal to the signatories and terminated at Mary Keen’s death.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the right of first refusal runs with the land or terminates on death | Ryans contend the right may bind heirs and continues beyond life. | Lawyers Title/Agri-Town argue the right is personal and terminates at Keen death. | Right of first refusal is personal and terminates at Mary's death. |
| Contract interpretation control between specific and general terms | Ryans argue language binding heirs creates lasting effect. | Defendants rely on specific reciprocal clause limiting to signatories; general language is subordinate. | Specific terms control; the right was limited to signatories and not binding heirs. |
| Whether the Purchase Agreement language creates an ambiguity requiring extrinsic evidence | Ryans claim ambiguity exists due to mixed language about heirs and signatories. | Defendants argue unambiguous: personal right not running with land. | Contract language was unambiguous; interpretation favors personal-right reading. |
| Whether summary judgment was proper given lack of genuine issue of material fact | Ryans suggest factual disputes about intent and scope. | Record shows no genuine issue; contract terms control. | Summary judgment proper; no genuine issues of material fact. |
Key Cases Cited
- Hyperbaric Oxygen Therapy Sys., Inc. v. St. Joseph Med. Ctr. of Ft. Wayne, Inc., 683 N.E.2d 243 (Ind.Ct.App. 1997) (contract interpretation and intent governs rights and restrictions)
- Magee v. Garry-Magee, 833 N.E.2d 1083 (Ind.Ct.App. 2005) (specific terms control over general terms within contracts)
- Burkhart Advertising, Inc. v. City of Fort Wayne, 918 N.E.2d 628 (Ind.Ct.App. 2009) (specific terms control over general language in contracts)
- F.B.I. Farms, Inc. v. Moore, 798 N.E.2d 440 (Ind. 2003) (restrictions on transfer construed to further manifest intent; disfavor restrictions)
- Mayer v. BMR Properties, LLC, 830 N.E.2d 971 (Ind.Ct.App. 2005) (restrictive covenants generally disfavored; strict construction)
- Roemhild v. Jones, 239 F.2d 492 (8th Cir. 1957) (whether option is personal and terminates at grantor's death)
- Brauer v. Hobbs, 391 N.W.2d 482 (Mich.App. 1986) (right of first refusal terminates on grantor's death when not intended to bind heirs)
- Waterstradt v. Snyder, 194 N.W.2d 389 (Mich.App. 1971) (options may be limited to lives of the parties; lack of contrary intent ends)