In this case involving the validity of a right of first refusal contained in a deed to real property, the dispositive issue is whether the trial court properly rendered summary judgment for the defendants on all issues. The plaintiff, Donald E. Hare, owns certain real property in the town of Woodstock. The defendants John McClellan, Anthony B. McClellan and Faith McClellan LeBaron (McClellans) conveyed a parcel of neighboring real property to the defendant Laura Ann Curley. The plaintiff, claiming that he had a valid right of first refusal on the parcel conveyed, brought this action seeking monetary damages from the McClellans and a mandatory injunction that would require Curley to convey the parcel to him in exchange for $45,000. The defendants, in a counterclaim, sought a judgment declaring the plaintiffs alleged right of first refusal invalid. The defendants moved for summary judgment on the plaintiff’s complaint and on the counterclaim, and the trial court granted the motion, rendering judgment for the defendants.
The underlying facts are undisputed. Margaret T. Tourtellotte, the mother of the McClellans, owned a large parcel of real property in the town of Woodstock. A discontinued highway known as the Old Connectiсut Path ran in a southwesterly direction through the property. In 1973, Tourtellotte sold a portion of the
The deed from Tourtellotte to the plaintiff also included the following provision: “In the event that the Seller offers for sale land contiguous to the within described premises, with exceptions and qualifications as hereinafter noted, the Buyer shall have an option to purchase same for the asking price and for a period not to exceed thirty days after written notice has been mailed by the Seller to the Buyer at the Buyer’s, last known address. Failure to exercise this option within the said 30 day period shall render this option null and void, and of no effect. . . . For purposes оf this paragraph the ‘discontinued highway’ on the above map shall be deemed to be contiguous land of the Seller.” (Emphasis added.)
Sometime after she conveyed this property on the southerly side of the road to the plaintiff, Tourtellotte subdivided her remaining property on the northerly side of the road into three separate parcels. In January 1990, Tourtellotte informed the plaintiff of her intention to sell one of the three parcels. The plaintiff subsequently executed a release of any right or claim he might have had in that parcel by reason of his right of first refusal. In September, 1992, Tourtellotte’s attorney informed the plaintiff that the second parcel was to be sold, and stated in a letter that “[u]nder the terms of the right of first refusal, you have a right to elect [to purchase] the property at the same price as offered
The plaintiff subsequently brought this action to enforce his “right of first refusal,” seeking monetary damages from the McClellans and a mandatory injunction to require Curley to convey the property to him in exchange for $45,000, the price that she had paid for the parcel. The defendants filed an answer and a counterclaim, which alleged that the parcel sold to Curley was not subject to the right of first refusal because that parcel was not “contiguous” to the plaintiff’s property. The defendants further sought to have the plaintiffs interest in the parcel declared invalid because, among other reasons, it constituted an unreasonable restraint on alienation or was violative of the statutory rule against perpetuities. See General Statutes § 45a-490 et seq.
The defendants moved for summary judgment on all counts of the complaint and on the counterclaim. The plaintiff filed two affidavits in opposition to the defendants’ motion. In the first, the plaintiff recounted the histоry of the conveyances set forth above. He also
In an oral decision, the trial court rendered summary judgment on all issues in favor of the defendants. The court based its decision on two independent grounds. First, the court concluded that the right of first refusal was an unreasonable restraint on alienation, and was therefore invalid.
We begin our analysis by reiterating the standard of review of a trial court’s decision to grant a motion for summary judgment. “Practice Book § 384 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. In deciding a motion for summary judgment, the trial court must view the evidence in the
With that standard in mind, we turn to the specific claims of the plaintiff.
I
We initially consider whether the trial court was correct in granting the motion for summary judgment on the ground that the right of first refusal was a restraint on alienation that was unreasonable.
A right of first refusal is known more technically as a preemptive option, as a right of preemption, or simply as a preemption.
Whether a preemptive option is reasonable or unreasonable is a question of law for the court. Cf. Robert S. Weiss & Associates, Inc. v. Wiederlight,
For several reasons, we are persuaded that thе trial court should not have granted the defendants’ motion for summary judgment on the ground that the preemptive option was unreasonable. First, there is no indication in the record that the trial court, in making its determination of reasonableness, considered any factor other than the duration of the restraint. The transcript of the court’s oral decision contains repeated references to the termination date of the preemptive option, but none to its purpose or to the method of determining price. Because the record does not demonstrate thаt the trial court properly applied the law with respect to the reasonableness of the preemptive option, therefore, the summary judgment cannot be sustained.
Second, genuine issues of material fact exist with respect to the two factors apparently not considered by the trial court. For example, with respect to the purpose of the preemptive option, the plaintiff’s affidavit indicated that the plaintiff had sought such a right because he was concerned about how the property north of the discontinued highway would be developed. This was in stark contrast to the assertion of the defendants that the preemptive option applied only as to the discontinued highway itself. Moreover, with
“The duration of the restraint is not measured by the life of the preemptive right. The rule does not condemn restrictions on transfer, i.e., provisions which postpone sale during the option period: it condemns only the ‘effective prohibition against transferability itself’ . . . .” (Citations omitted; emphasis in original.) Metropolitan Transportation Authority v. Bruken Realty Corp., supra,
In this case, the language of the preemptive option stated that “the Buyer shall have an option to purchase same for the asking price and for a period not to exceed thirty days after written notice has been mailed by the Seller to the Buyer at the Buyer’s last known address. Failure to exercise this option within the said 30 day
II
The trial court’s second stated ground for granting summary judgment was its conclusion that, regardless of whether the preemptive option was reasonable, the Curlеy parcel would not have been subject to it. The court first determined that “the deed is clear on its face” that properties subject to the right must be “contiguous” to the plaintiff’s land, and that “[t]he deed needs no further interpretation.” The court further concluded that the Curley parcel was not contiguous to the plaintiffs land because that parcel was separated from the plaintiff’s land by the discontinued highway. The trial court, therefore, rendered judgment for the defendants on this ground. We disagree with the trial court’s interpretation of the deed and, consequently, with its decision to rеnder summary judgment.
In construing a deed, a court must consider the language and terms of the instrument as a whole. Lake Garda Improvement Assn. v. Battistoni,
The record in this case demonstrates that the trial court did not properly apply these principles in interpreting the language of the deed. The trial court, determining that “the deed is clear on its face” and that “[t]he deed needs no further interpretation,” declined to consider the circumstances surrounding the inclusion of the preemptive option in the deed or the intention of the parties with respect to its language. For two reasons, however, we conclude that the language of the provision was not clear and unambiguous, and that the trial court should have looked to extrinsic evidence offered by the parties as to their intentions and the circumstances surrounding the inclusion of the preemptive option in the deed.
First, the word “contiguous” is not susceptible of only one clear and definite meaning. Although the defendants assert that the preemptive option applies only to property that was in “actual contact, or touching” the land of the plaintiff, that is not the only possible interpretation. Black’s Law Dictionary, for example, defines contiguous as also meaning “[i]n close proximity,” “neighboring” or “near in succession.” Black’s Law
Second, the interpretation proffered by the defendants is not wholly consistent with other provisions contained in the deed. For purposes of exercising the preemptive option, the deed statеs that “the ‘discontinued highway’ on the above map shall be deemed to be contiguous land of the seller.” The defendants assert that this provision means only that the road, and not property north of the road, is subject to the plaintiff’s right of first refusal. In the deed, however, Tourtellotte had “expressly disclaimed] any warranties with reference to this road,” though she had warranted the remainder of the property conveyed. Indeed, the language of the deed indicates that Tourtellotte was not even certain that she had “a sufficient legal interest in and to said road” in order to grant thе plaintiff a right of way over it. It seems highly doubtful that the parties would have negotiated a provision granting the plaintiff a preemptive option in property that the seller was not even certain was hers. It is more reasonable that the parties included this provision as a precaution against the possibility that Tourtellotte did not have a legal interest in the road. In such a case, the provision in the deed would have operated to make clear that, for purposes of the preemptive option, the discontinued highway that was owned by someone else wоuld not sever the otherwise “contiguous” property to the north of the highway owned by the defendants and render that property no longer subject to the plaintiff’s preemptive option.
Indeed, the rules applicable to the construction of contracts in general yield the same result. Although the parol evidence rule “prohibits the introduction of evidence that varies or contradicts an exclusive written agreement”; Ruscito v. F-Dyne Electronics Co.,
For the reasons set forth above, the language in the deed and the scope of the preemрtive option are ambiguous, thus requiring reference to extrinsic evidence such as the affidavits of the plaintiff and his attorney and the past course of dealing of the parties when other parcels north of the road had become available. The trial court, therefore, should not have rendered summary judgment for the defendants on the ground that the language of the deed was “clear on its face.”
The judgment is reversed and the case is remanded to the trial court for further proceedings consistent with this opinion.
In this opinion the other justices concurred.
Notes
The plaintiff appealed from the judgment of the trial сourt to the Appellate Court, and we transferred the appeal to this court pursuant to Practice Book § 4023 and General Statutes § 51-199 (c).
The record does not indicate how the defendants came to own their mother’s property.
The defendants also claimed that the plaintiffs right of first refusal was invalid because it did not satisfy the statute of frauds and because the plaintiff was guilty of laches or had waived his right to the parcel. Because these issues are not before us, we do not address them.
The trial court dismissed the defendants’ contention that the right of first refusal was subject to the statutory rule against perpetuities. See footnote 5.
We note that the parties have not challenged the trial court’s preliminary determination that a right of first refusal is subject to analysis only as a restraint on alienation, and not as a future interest subject to the statutory rule against perpetuities. See footnote 4. The parties, apparently assuming that the trial court’s frame of analysis was correct, dispute only whether the precise type of right in this case was a “reasonable” or “unreasonable” restraint on alienation. We have never considеred the issue of whether a right of first refusal to purchase real property is subject to analysis as a restraint on alienation or as a future interest subject to the perpetuities rule. The issue has, however, been litigated in the trial court; see, e.g., J L J Associates, Inc. v. Persiani,
Nevertheless, because the parties to this litigation have not raised these issues before us, we do not consider them. We confine our analysis, therefore, only to the issue of whether the right of first refusal contained in the Tourtellotte deed to the plaintiff is “reasonable.”
“Terminology in cases involving pre-emptive rights has been somewhat loose and therefore subject to criticism. Although there is a distinct difference between a pre-emption and an option, courts often refer to preemptions as options.” Annot.,
We have never before attempted to define the factors that must be weighed in determining whether a preemptive option is “reasonable” or “unreasonable.” Although older cases of this court have addressed the validity of such rights, none of the opinions in those cases clearly sets forth why the right wаs being held valid or invalid. Nevertheless, the results reached in these cases can be understood by reference to the three factors announced today, and specifically the third factor relating to the method of setting the price for the property. For example, in Lewis Oyster Co. v. West,
The defendants argue, as an alternative ground for affirming the decision of the trial court, that the provision in question was not a preemptive option at all, but a strict option. According to the defendants, this distinction is determinative of how much the holder of the right must pay for its exercise. The defendants argue that if the right is characterized as an option, the plaintiff had only the right to purchase the property at the price at which the sellers initially placed it on the market. On the other hand, according to the dеfendants, if the right is characterized as a preemptive option, the plaintiff had the right to purchase the property for the price at which the sellers actually received an offer to buy.
Although we agree with the defendants that there is a technical difference between an option and a preemption; see footnote 6 and accompanying text; we do not agree that this difference necessarily determines the price that the holder of the option must pay for its exercise. We can find no authority for such a proposition, nor havе the defendants cited any. Moreover, we cannot imagine why the parties to such a contract should not be allowed to determine for themselves on what terms or at what price the right may be exercised, regardless of whether it is labeled an “option” or a “preemptive option.” Indeed, the fact that the defendants dispute the method for determining the price to be paid bolsters the plaintiff’s argument that summary judgment was not proper in this case.
We note, however, that the 1973 deed from Tourtellotte to the plaintiff appears to have given a preemptive option only to the “buyer,” rather than to the buyer and his heirs, devisees and assignees.