Lead Opinion
Opinion of the Court by
I. Introduction
At issue in this appeal is whether the sale of an undivided parcel of real property trig
II. Background
A. Factual Background
None of the material facts in this case are genuinely disputed. At issue in this case is a half-acre parcel of land with a house located on Anini Road on Kauai (sometimes “the Property”). The Property is part of an undivided 1040-acre parcel (sometimes “Master Parcel”) now owned by Princeville Prince Golf Course, LLC (“PPGC”). In 1971, Kut-kowski began subleasing the Property from John Kai. When Kai died, Kutkowski continued leasing the Property from Kai’s brother, until Kutkowski himself became a direct lessee of Princeville Development Corporation under a five-year Agricultural Lease dated November 1, 1984. Thei’e was no option to purchase in the original Agricultural Lease.
After several renewals of the Agricultural Lease, Kutkowski and Princeville Corporation
Licensor [Princeville Corporation] expressly reserves the right to sell the licensed premises during the term of this license and to place such signs and notices on or about the premises for such purpose, subject only to the rights of the Licensee [the Kutkowskis] contained herein. In the event Licensor decides to sell the premises, it shall be first offered to Licensee on terms and conditions provided by Li-censor; PROVIDED, HOWEVER, that Licensee shall have at all times faithfully and punctually performed all of the covenants and conditions of this agreement on the part of Licensee to be performed. Licensee shall have sixty (60) days to accept the Licensor’s offer or make a counter offer, PROVIDED [sic], HOWEVER, that if no sales contract is executed within one hundred twenty (120) days after Licensor’s initial offer, (1) Licensor shall be free to offer the premises for sale to the general public and (2) this license agreement shall be automatically amended with occupancy to continue on a month to month term. Should the premises be thereafter sold during the term of the month to month license, Licensor shall give Licensee forty-five (45) days prior notice of termination of this license, upon which Licensee shall relinquish all rights hereunder.
(Emphasis added).
The License Agreement also contained the following provision entitled “Effect of Licensee’s holding over” in Paragraph 22, which stated:
Any holding over after the expiration of the term of this agreement, with consent of Licensor, shall be construed to be a license from month to month, at the same rate as required to be paid by Licensee for the period immediately prior to the expiration of the term hereof, and shall otherwise be on the terms and conditions herein specified, so far as applicable.
A proposed sale of the Master Parcel from Princeville Corporation to PPGC was initiated on July 14, 2004. By letter dated September 6, 2004, Princeville Corporation proposed an elimination of Kutkowski’s option to purchase the Property and enclosed a draft amendment to the License Agreement. Kut-kowski did not sign it. Rather, in a letter, dated October 25, 2004, Kutkowski offered Princeville Corporation $250,000 for the Property, which was rejected. The sale closed on March 17, 2005.
Kutkowski’s son remains on the Property. Kutkowski has continued to pay rent to PPGC, and PPGC has accepted the rental payments.
On January 10, 2005, Kutkowski filed a Complaint against Princeville Corporation, praying for specific performance of Paragraph 2 of the License Agreement. Kutkow-ski also filed a Notice of Pendency of Action over the Property. Under the terms of the March 17, 2005 sale, PPGC and Princeville Corporation entered into an Assumption Agreement, under which PPGC accepted the grant and transfer from Princeville Corporation of, inter alia, the License Agreement and Kutkowski’s claim for specific performance. Thereafter, on August 3, 2005, Kutkowski and Princeville Corporation filed a stipulation substituting PPGC as the defendant for Princeville Corporation. PPGC then counterclaimed, seeking declarations that (1) the license agreement was ineffective in conveying to Kutkowski any rights in the Property, and, in the alternative, (2) that the option to purchase clause (if it ever was effective) expired by its own terms on April 30, 2003.
The parties brought cross motions for summary judgment. Preliminarily, Kutkow-ski and PPGC agreed that the “option to purchase” contained in the License Agreement was really a “right of first refusal” (“ROFR”).
As to the first issue, Kutkowski and PPGC each relied on the plain language of Paragraphs 2 and 22 in the License Agreement to argue, respectively, that the ROFR did and did not survive past the April 30, 2003 end date of the License Agreement. Neither contends that Paragraphs 2 and 22 are ambiguous, although each provided parol evidence (in case the circuit court found the provisions to be ambiguous) tending to support each’s position. In addition to the plain language arguments, Kutkowski and PPGC each marshaled ease law from other states and federal courts in support of each’s position.
As to the second issue, Kutkowski and PPGC disagreed that the sale of the Master Parcel triggered Kutkowski’s ROFR over the Property. PPGC argued that even if the ROFR had survived into the holdover period, Kutkowski could not exercise the right. PPGC also argued the ROFR extended only to the Property, not the entire Master Parcel, and the Property was never offered for sale; therefore, the ROFR was never triggered.
Kutkowski, on the other hand, argued that a lessor may not preemptively defeat a lessee’s ROFR over a smaller parcel by selling a larger parcel that contains the smaller parcel. Kutkowski argued the remedy in those instances is specific performance.
Further, PPGC argued that the sale of the Property was conditioned upon (a) a county-approved subdivision plan carving out the Property, and (b) PPGC’s decision to sell the Property. PPGC also argued the ROFR was void and unenforceable because it was legally impossible to perform the terms of the ROFR in an area zoned for five-acre minimum lot size. Kutkowski, on the other hand, argued that it was not legally impossible for PPGC to carve out Kutkowski’s Property under the Kauai County Code, just burdensome, suggesting a variance was possible.
In conclusion, PPGC requested that the circuit court enter an order dismissing Kut-kowski’s claims, declare that Kutkowski’s
The circuit court
[T]he sale of the one thousand forty (1040) acre parcel of land identified by TMK (4) 5-3-06-014 by Prineeville Corporation to [PPGC] did not constitute a decision to sell the premises described in the License Agreement (the “Premises”), and, therefore, the first right of refusal granted thereby was not triggered by that event.
The circuit court subsequently entered final judgment, Kutkowski timely appealed, and PPGC timely cross-appealed. According to the parties, a separate ejectment action initiated by PPGC against Kutkowski has been stayed pending the outcome of this appeal.
C. ICA Appeal
On appeal, Kutkowski raised as his sole Point of Error the following: “The Circuit Court erred when it denied equitable relief to Kutkowski because it held that the sale of the Master Parcel did not constitute a ‘decision to sell’ the Premises which would trigger Kutkowski’s right of first refusal under paragraph 2 of the Agreement.” Kutkowski also argued that PPGC’s attempt to eliminate Kutkowski’s ROFR via a proposed amendment to the License Agreement evidenced PPGCs “wrongful intent” to defeat Kutkow-ski’s ROFR. Therefore, he requested that specific performance be ordered and that the circuit court determine the fair market value of the half-acre parcel. In the alternative, he requested that the sale to PPGC be enjoined or cancelled and the entire property recon-veyed.
In its Answering Brief, PPGC pointed out that the “wrongful intent” argument was raised for the first time on appeal. PPGC argued that Kutkowski needed a “reality cheek,” as the sale of the Master Parcel was not wrongfully intended to frustrate the ROFR over a half-acre parcel. PPGC also pointed out that Kutkowski requested fair market valuation, an injunction, or a cancellation of the sale to PPGC for the first time on appeal as well. The bottom line, to PPGC, was that at the trial level, the focus was never on whether PPGC defeated Kutkow-ski’s ROFR and what remedies should be available for the breach, but whether the sale of the Master Parcel triggered the ROFR in the first place. PPGC also argued that the ROFR provision was void because it is illegal to offer to sell an unsubdivided parcel under the Kauai Subdivision Ordinance.
PPGC also filed a cross-appeal challenging the circuit court’s conclusion that the ROFR survived into the holdover period.
The ICA issued a published opinion affirming the circuit court. Kutkowski v. Princeville Prince Golf Course, LLC,
*354 (4) [Generally, the desire to sell a large tract of land may not be taken as a manifestation of the seller’s intention or desire to sell a small, undivided[] parcel contained within it, so as to convert a right of first refusal on the smaller parcel into an exercisable option for its purchase; (5) Kutkowski’s requested relief of specific performance would require a wholesale reformation of the parties’ agreement and, inter alia, require judicial establishment of a price term, which would directly contradict the bargained-for rights of the parties; (6) Hawai'i courts will not allow a property owner and a purchaser to, in effect, destroy a bargained-for right of first refusal before its expiration and, in many circumstances, would order an injunction of a prospective sale or the rescission and/or reconveyance of a completed sale, in order to maintain the status quo, preserving a lessee’s right of first refusal until its exercise, waiver, or termination at the expiration of the lease; and (7) under the circumstances of this case, including that the lessee holding the right of first refusal did not seek to enjoin or rescind the sale or a large undivided parcel of land that neither triggered nor destroyed a right of first refusal applicable to a small portion of that land, the requested relief of specific performance of the right of first refusal was properly denied.
The ICA first rejected Kutkowski’s point of error that the sale of the Master Parcel triggered his ROFR and that he was entitled to specific performance, concluding that the License Agreement’s reference to “the premises” in the ROFR provision meant the half-acre parcel and not the 1040-acre parcel, and there was no decision to sell just the half-acre parcel.
[T]he holder of the option of first refusal on a portion only of a larger tract may not obtain specific performance of his option so as to require conveyance to him of the whole property the owner desires to sell [.] Nor may the property owner, by an acceptance of an offer to sell the whole, be compelled by judicial decree to dispose of the optioned part separately from the property as a whole. An attempt to sell the whole may not be taken as a manifestation of an intention or desire on the part of the owner to sell the smaller optioned part so as to give the optionee the right to purchase the same[.]
The ICA reasoned, however, that the lessee’s ROFR should at least be preserved until the termination of that right; in such a case, the remedy is not specific performance but an injunction on the sale of the larger parcel until the termination of the lessee’s ROFR in order to maintain the status quo ante.
In any event, the ICA noted, PPGC “expressly assumed and in effect acknowledged that Kutkowski’s rights under the License Agreement survived the sale of the Master Parcel” by entering into the Assumption Agreement with its predecessor, Prineeville Corporation.
III. Arguments on Certiorari
On certiorari, Kutkowski argues that the ICA gravely erred in (1) affirming the circuit court’s Final Judgment; (2) finding that Kut-kowski’s ROFR was not triggered upon the sale of the Master Parcel to PPGC; (3) finding that Kutkowski’s requested relief of specific performance would require a wholesale reformation of the parties’ agreement; and (4) denying any equitable relief because Kut-kowski did not seek to enjoin or rescind the sale of the larger parcel of which the leased premises were a part.
To Kutkowski, the plain meaning of “sell” in the ROFR provision meant the sale of the Property, regardless of whether it was included in a larger sale. Kutkowski also argues that the ICA’s decision to not provide him any equitable relief has put him in a different position than he was in status quo ante, because now he has a new landlord. Kutkowski seeks equitable relief principally in the form of compelling PPGC to offer him the Property for sale, but he argues he is also entitled to an injunction or a rescission of the sale because PPGC violated the terms of the ROFR.
PPGC counter-argues that Kutkowski’s focus on the word “sell” in the ROFR provision is wrong; the operative words in the ROFR provision were “In the event the Licensor decides to sell the premises,” and the ICA correctly interpreted the phrase “the premises” to mean just the half-acre parcel. Thus, according to PPGC, although the Property changed hands, the ROFR itself was not triggered upon the sale of the Master Parcel. PPGC also counter-argues that Kutkowski stipulated to the change of landlord and amended his Complaint accordingly. Lastly, PPGC argues that the ICA could not have granted equitable relief to Kutkowski because performing the terms of the ROFR was legally impossible.
IV. Discussion
We disagree with the ICA’s adoption of the majority rule in the instant case, and, under the specific circumstances of this case, prefer instead to adopt the minority rule. Our established rules of contract construction would resolve the interpretation of the ROFR along the lines of the minority rule, which respects the parties’ intent in assenting to the ROFR.
A. The Majority and Minority Rules
The majority rule holds that the sale of the larger parcel to a third party does not manifest the seller’s intent to sell just the smaller parcel. See Guaclides,
However, the “owner of the whole may not impair or destroy the preemptive right to purchase the part by a sale or agreement to sell the whole to some third person.” Guaclides,
One court, however, afforded the lessee no remedy, concluding that “there was no evidence of any wrongful intent” behind the seller’s decision to sell a larger tract encompassing a smaller tract burdened by the lessee’s ROFR. Crow-Spieker #23 v. Robert L. Helms Constr. & Dev. Co.,
Further, under the majority rule, the right of first refusal over the smaller parcel survives the sale of the larger parcel, and subsequent third party buyers with notice purchase subject to the right of first refusal. See Atlantic Refining Co. v. Wyoming Nat’l Bank,
The minority rule, on the other hand, holds that the sale of the larger parcel to a third party does manifest the seller’s intent to sell the smaller parcel as well. Berry-Iverson Co.,
According to the minority rule, a sale of the larger parcel without honoring the right of first refusal over the smaller parcel constitutes a breach, for which courts possess the equitable discretion to order specific performance as the remedy. See Brenner,
Some courts allow for judicial determination of the purchase price for the smaller parcel. See Brenner,
The majority rule presumes the lessor did not intend to sell a smaller parcel included in a sale of a larger parcel, never triggering the ROFR; the minority rule recognizes that the smaller parcel is in fact included upon the sale of the larger parcel, evidencing the lessor’s intent to sell the smaller parcel, triggering the ROFR. As applied to the specific circumstances of this case, the minority rule accords primacy to the parties’ intent in assenting to the ROFR in the first place, and we expressly adopt it here. The majority rule renders ROFR’s over smaller parcels illusory upon the lessor’s decision to include the smaller parcel as part of a larger property sale to a third party, which does not enforce the parties’ bargain for a ROFR.
B. Hawai'i Law on Contract Interpretation
Further, the primacy of the parties’ intent underlying the minority rule is in line with our case law on contract interpretation. “In construing a lease we must avoid an unreasonable interpretation if that can be done consistently with the tenor of the agreement and choose the most obviously just interpretation as the presumed intent.” Broida v. Hayashi,
Interpretation of the parties’ intent begins with the language the parties use. For the reader’s convenience, the ROFR provision is reproduced below:
2. Option to Purchase: Licensor [Prinee-ville Corporation] expressly reserves the*358 right to sell the licensed premises during the term of this license and to place such signs and notices on or about the premises for such purpose, subject only to the rights of the Licensee [the Kutkowskis] contained herein. In the event Licensor decides to sell the premises, it shall be first offered to Licensee on terms and conditions provided by Licensor; PROVIDED, HOWEVER, that Licensee shall have at all times faithfully and punctually performed all of the covenants and conditions of this agreement on the part of Licensee to be performed. Licensee shall have sixty (60) days to accept the Licensor’s offer or make a counter offer, PROVIDED [sic], HOWEVER, that if no sales contract is executed within one hundred twenty (120) days after Licensor’s initial offer, (1) Licensor shall be free to offer the premises for sale to the general public and (2) this license agreement shall be automatically amended with occupancy to continue on a month to month term. Should the premises be thereafter sold during the term of the month to month license, Licensor shall give Licensee forty-five (45) days prior notice of termination of this license, upon which Licensee shall relinquish all rights hereunder.
To the ICA, the term “the premises” in the second sentence’s phrase, “In the event Li-censor decides to sell the premises,” referred only to the half-acre parcel.
The minority rule, as applied to the circumstances of this case, gives effect to the parties’ agreement. Berry-Iverson Co.,
Thus, the decision to sell the Master Parcel was a decision to “sell the premises.” Under the terms of the ROFR, Princeville Corporation was required to “first offer[] [the premises] to [Kutkowski] on terms and conditions provided by the Licensor[.]” In this case, Princeville Corporation’s decision to sell the premises to PPGC occurred at least by July 2004, when the sale of the Master Parcel commenced. It is undisputed that Princeville Corporation did not first offer the premises to Kutkowski.
In light of this sequence of events, the ICA’s adoption of the majority rule, which holds that the ROFR was not triggered, in effect, also relieved PPGC of its duty of good faith and fair dealing in performing the contract. See Restatement (Second) of Contracts § 205 (1981)(“Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement.”); Young v. Allstate Ins. Co.,
To further disclaim any obligation to perform the ROFR in good faith and fair dealing, PPGC argues that performance of the contract was legally impossible in any event, because it could not have subdivided the half-acre parcel in an area zoned for agricultural use, where minimum lot size is five acres. Thus, PPGC argues, Kutkowski is not entitled to specific performance. Kutkowski cited to the County of Kaua'i, Kauai County Code, § 9-3.1 (requiring minimum lot size to conform to the provisions of the Kauai Comprehensive Zoning Ordinance, respectively); the County of Kaua'i, Comprehensive Zoning Ordinance, § 8-7.4(b)(2)(generally requiring a parcel of over 75 acres to be subdivided into smaller parcels no larger than five acres); and Whitlow v. Jennings,
PPGC’s argument misses the point of the ROFR, which was for the Licensor to “offer[ to sell the premises] to Licensee on terms and conditions provided by the Li-censor,” not to outright sell an unsubdivided half-acre parcel to the Licensee.
[T]he right of private contract is no small part of the liberty of the citizen, and ... the usual and most important functions of courts of justice is rather to maintain and enforce contracts, than to enable parties thereto to escape from their obligation on the pretext of public policy.... [I]f there is one thing which more than another public policy requires it is that men of full age and competent understanding shall have the utmost liberty of contracting, and that their contracts when entered into freely and voluntarily shall be held sacred and shall be enforced by courts of justice.
Robinson v. Thurston,
This court does not attempt to set forth the path that PPGC must take in performing the ROFR. It merely construes the ROFR to presume that there existed “terms and conditions” acceptable to the Licensor that would allow it to offer the premises to Kutkowski for sale, pursuant to its duty to perform the
Furthermore, a presumption that these terms and conditions existed is a reasonable interpretation, when construing the ROFR against the drafter, who would have been in a better position to know which options were available to it for carving out the half-acre. See Restatement (Second) of Contracts § 206 (1981) (“In choosing among the reasonable meanings of a promise or agreement of a term thereof, that meaning is generally preferred which operates against the party who supplies the words or from whom a writing otherwise proceeds.”); Amfac,
C. The Remedy
Having concluded that the ROFR was triggered by Princeville Corporation’s decision to sell the Master Parcel in 2005, we now must determine the remedy available to Kutkowski. We agree with the ICA that Kutkowski’s ROFR continues to remain intact throughout the holdover period as against PPGC, who has assumed the rights and obligations once held by Princeville Corporation with regard to Kutkowski. In effect, PPGC bought the Master Parcel subject to Kutkowski’s ROFR, which survives so long as Kutkowski remains a holdover tenant.
V. Conclusion
We agree with the ICA that Kutkowski’s ROFR continues into the holdover period. The ROFR can be presently exercised because Princeville Corporation’s decision to sell the Master Parcel triggered its (and now PPGC’s assumed) obligation to perform. We therefore reverse the ICA’s Judgment on Appeal and remand this case to the circuit court for further proceedings consistent with this opinion.
Notes
. It is unclear from the record, but it appears that Princeville Corporation is a successor to Princeville Development Corporation.
. An "option to purchase real property” is a "contract by which an owner of realty enters an agreement with another allowing the latter to buy the property at a specified price within a specified time, or within a reasonable time in the future, but without imposing an obligation to purchase upon the person to whom it is given.” Black’s Law Dictionary at 1204 (9th Ed.2009). A "right of first refusal” is a "potential buyer’s contractual right to meet the terms of a third party’s higher offer.” Black’s Law Dictionary at 1439 (9th Ed.2009). Although the Black’s Law Dictionary definition of "right of first refusal” includes a common condition precedent ("a third party’s higher offer”), which the Dissent also quotes Corbin on Contracts for, the plain language of the instant ROFR included no such condition. See Concurrence/Dissent at 361,
. The Honorable Kathleen N.A. Watanabe presided.
. See
. PPGC did not file its own Application for Writ of Certiorari on the holdover issue, but it did challenge the ICA majority's analysis of the holdover issue in its Response to Kutkowski's Application for Writ of Certiorari. We do not believe the ICA erred in its analysis of the holdover issue under the facts of this case, so we decline to exercise plain error review pursuant to Hawai'i Rules of Appellate Procedure Rule 40.1 to address this issue.
. Therefore, we do not disagree with the Dissent (or the ICA) that "the premises" in the ROFR referred to just the half-acre parcel. As a practical matter, however, there is no way the sale of the undivided 1040-acre parcel would not include the half-acre parcel.
. The Dissent points to Kutkowski’s Declaration, which stated that the Licensor did not first sell the half-acre to Kutkowski, as evidence failing to "indicate whether the parties intended, at the time of entering into the license agreement, to trigger the right of first refusal upon Princeville Corporation’s intent to sell the master parcel.” Dissent at 363 n. 6,
. The ICA also recognized that the ROFR gave the Licensor a "right to determine the terms and conditions of any sale, including the purchase price and the satisfaction of any conditions.”
. The Dissent argues that, if the “parties [could have] expressly contracted] for this result,” then it is not the case that the ROFR would be meaningless if interpreted to exclude the sale of the master parcel as a triggering event. Concurrence/Dissent at 362 n. 4,
. The majority and Concurrence/Dissent agree that the ROFR remains intact and enforceable during Kutkowski’s holdover tenancy. Concurrence/Dissent at 362 n. 5,
Concurrence Opinion
Opinion by
concurring in part and dissenting in part.
I respectfully dissent. In my view, Robert Kutkowski’s right of first refusal on the leased, half-acre parcel was not triggered by the sale of the undivided, 1,040-acre master parcel to Princeville Prince Golf Course, LLC (PPGC). I therefore respectfully disagree with the majority’s determination that PPGC must offer to sell the property to
To briefly recount the facts, Kutkowski was a holdover tenant on a half-acre parcel of land, which was part of an undivided, 1,040-acre master parcel owned by Princeville Corporation. Kutkowski’s license agreement with Princeville Corporation contained the following right of first refusal provision: “In the event Licensor [Princeville Corporation] decides to sell the premises, it shall be first offered to Licensee on terms and conditions provided by Lieensor[.]” Princeville Corporation eventually sold the master parcel to PPGC and, pursuant to the terms of the sale, PPGC assumed Princeville Corporation’s obligations under the license agreement. Kut-kowski argues that his right of first refusal on the half-acre parcel was triggered by the sale of the master parcel to PPGC and, accordingly, seeks specific performance of his right of first refusal or, alternatively, an injunction or rescission of the sale.
A majority of other jurisdictions have concluded, in similar circumstances, that a decision to sell a larger tract of land does not trigger a right of first refusal on a smaller, included parcel. See, e.g., Aden v. Estate of Hathaway,
Here, the license agreement between Kut-kowski and Princeville Corporation afforded Kutkowski a license to occupy and use the “premises.” The “premises” were explicitly defined by the agreement as the half-acre parcel located on Anini Road. Thus, the scope of the license agreement encompassed only Kutkowski’s half-acre parcel, and did not extend to the master parcel. See Hi Kai Inv., Ltd. v. Aloha Futons Beds & Waterbeds, Inc.,
Moreover, the license agreement reserved to Princeville Corporation the right to sell the premises, and to place signs on the premises relating to the sale, but afforded Kut-kowski a right of first refusal in the event Princeville Corporation “decide[d] to sell the premisesf.]”
This analysis does not render the right of first refusal meaningless. See majority opinion at 358,
A minority of other jurisdictions have held that a right of first refusal is triggered in these circumstances on the ground that, “[t]o conclude otherwise would permit an owner and prospective purchaser to, in effect, destroy a bargained-for purchase preemption before the expiration of the term for which such preemption was obtained.” Berry-Iverson Co. v. Johnson,
Nevertheless, the majority opinion concludes that triggering the right of first refusal best effectuates the intent of the parties in the “specific circumstances of this case.” Majority opinion at 357,
Moreover, Kutkowski does not cite to any evidence appearing in the record that would indicate the parties intended to trigger the right of first refusal upon Prineeville Corporation’s intent to sell the master parcel.
Thus, PPGC should not, “by an acceptance of an offer to sell the whole, be compelled by judicial decree to dispose of the optioned part separately from the property as a whole.” See Guaclides,
Accordingly, I respectfully dissent.
. However, I concur in the majority’s conclusion that the right of first refusal carried over into Kutkowski’s holdover tenancy, and that performance of the right of first refusal is not legally impossible. Majority opinion at 353 n.5, 359-60,
. A right of first refusal differs substantially from an option to purchase. 3 Eric Mills Holmes, Corbin on Contracts § 11.3 at 468 (Joseph M. Perillo, ed., rev. ed.1996) (noting that rights of first refusal "are closely related to the purposes of option contracts and yet are very dissimilar in the legal relations of the parties who make them”). A right of first refusal is defined as "[a] potential buyer’s contractual right to meet the terms of a third party’s higher offer.” Black's Law Dictionary 1439 (9th ed.2009). In contrast, an option to purchase real property is defined as “[a] contract by which an owner of realty enters an agreement with another allowing the latter to buy the property at a specified price within a specified time, or within a reasonable time in the future, but without imposing an obligation to purchase upon the person to whom it is given.” Id. at 1204.
Although the right of first refusal in the instant case was contingent on an intent to sell the premises on terms and conditions set by Prince-ville Corporation itself, rather than by a third-party offer, this did not alter the legal relations of the parties. Kutkowski’s right of first refusal remained subject to the condition precedent of Princeville Corporation’s decision to sell the premises.
. Kutkowski’s counsel acknowledged during oral argument that, "an ordinary person looking at that would say.... [y]ou’re not going to put out a sign on our little half-acre parcel to sell your 1,040-acre resort. You’re talking about putting out a sign to sell my half-acre parcel.... To me that means the sign out to sell that property not to sell the whole resort.” Oral Argument, Hawaii Supreme Court, at 49:15-49:52 (Oct. 18, 2012), available at http://www.courts.state.hi.us/ courts/oral_arguments/archive/oasc28826.html.
. The majority notes that Princeville Corporation could have drafted the right of first refusal provision to explicitly exclude the sale of the master parcel as a triggering event. Majority opinion at 361,
.Accordingly, I would hold that neither injunction nor rescission of the sale of the master parcel would be an appropriate remedy in this case, both because Kutkowski did not seek those remedies, and because the right of first refusal remains intact and enforceable in the event PPGC intends to sell the half-acre parcel during Kutkowski's tenancy. Additionally, there is no evidence that Princeville Corporation, in selling the master parcel to PPGC, acted with a wrongful intent to defeat Kutkowski’s right of first refusal.
. Kutkowski cites only to the following statement in his declaration: "Despite its intention to sell the Property, Prineeville [Corporation] did not first offer to sell the Property to me, which Prineeville was obligated to do under the Option to Purchase contained in the Agreement.” However, this statement does not indicate whether the parties intended, at the time of entering into the license agreement, to trigger the right of first refusal upon Prineeville Corporation’s intent to sell the master parcel.
