Marshall County District Court File No. CX0253
Considered and decided by Hudson, Presiding Judge; Randall, Judge; and
I. To trigger a person's right of first refusal, a property owner must notify the right-holder of an acceptable third-party offer.
II. When an agreement granting a right of first refusal is silent as to the method of notice required to trigger the right, any method that gives the right-holder notice of a potential sale and reasonably discloses the terms of the sale is sufficient to trigger the right of first refusal.
III. Once the holder of a right of first refusal receives reasonable notice of a potential sale, the right-holder has a duty to seek clarification of any unclear terms of the sale.
IV. When a request for sanctions for violating Minn. Stat. § 549.211, subd. 2 (2002), is initiated by a party's motion, a court may impose sanctions only if the motion is made separately from other motions or requests.
The opinion of the court was delivered by: Peterson, Judge
Affirmed in part and reversed in part
This consolidated appeal involves lawsuits brought separately by appellant Gregory Dyrdal and appellant David Dyrdal, in connection with the sale of two properties. Gregory Dyrdal sued respondents James Licking, Ed Faltin, and Ron Micke, seeking to enjoin the sale of a 452-acre parcel of land Licking owned. Gregory Dyrdal alleged that Licking deprived him of the opportunity to exercise his right of first refusal to buy the land by offering Faltin, the prospective buyer, terms that were more favorable than the terms that Licking offered to him. Gregory Dyrdal later dismissed his claim, having concluded that the more favorable terms Licking offered Faltin were insufficient to justify injunctive relief. He now appeals from the district court's order awarding respondents Licking, Faltin, and Micke bad-faith attorney fees as sanctions under Minn. Stat. § 549.211 (2002).
David Dyrdal (Dyrdal) sued respondent Golden Nuggets, Inc., seeking both a declaration that he was entitled to sole possession of a 640-acre parcel of land Golden Nuggets owned and damages for breach of Golden Nuggets's implied duty to repair. Both parties moved for summary judgment, and the district court ruled in favor of Golden Nuggets. Dyrdal now appeals from summary judgment dismissing his claims that Golden Nuggets (1) deprived him of the opportunity to exercise his right of first refusal to buy the land by not disclosing all the terms and conditions of an offer from Micke Pokel Farms, the prospective buyer, and (2) breached its implied duty to repair the ditch walls and embankments on the land. Dyrdal also appeals from summary judgment in favor of Golden Nuggets on its claim that Dyrdal tortiously interfered with Golden Nuggets's contractual relation with Micke Pokel Farms by recording a notice of lis pendens, and from the award of bad-faith attorney fees under Minn. Stat. § 549.211 (2002).
We affirm in part and reverse in part.
David Dyrdal began renting a 640-acre parcel of farmland from Golden Nuggets, Inc., in 1988. He executed leases in 1988, 1994, and 1999. The 1999 lease, in effect when this dispute arose, gave Dyrdal a right of first refusal to buy the land if another party made a bona fide offer to buy it. But the lease did not specify a method for providing notice of a bona fide offer. And, in contrast to the 1994 lease, which gave Dyrdal 45 days to accept or reject a third-party offer, the 1999 lease did not specify a time limit for exercising the right of first refusal. However, an undated and unsigned "clarification" sent to Dyrdal after the lease was executed gave Dyrdal 48 hours to match the terms of a third-party offer.
In early August 2001, Dan Narlock, Golden Nuggets's farm manager, notified Dyrdal that Golden Nuggets had received a bona fide offer for the land from respondent Micke Pokel Farms. Soon after, Dyrdal received a letter from Golden Nuggets's attorney, stating that Dyrdal's right of first refusal had expired after 48 hours from receiving notice of the proposed sale. Dyrdal responded that he was under the impression that he had 45 days to exercise his first-refusal right and that, in any event, he had not received a copy of the purchase agreement. Golden Nuggets faxed Dyrdal a signed but largely illegible copy of the purchase agreement. Shortly after, it sent Dyrdal a legible but unsigned copy, which Dyrdal received on August 21, 2001.
The purchase agreement reflected an offer from Micke Pokel Farms to buy the land for $265,000, and listed February 5, 2002, as the closing date. The purchase agreement conflicted with a letter Dyrdal received from Golden Nuggets's attorney, stating that the prospective buyer had offered $252,000 for the land. Dyrdal claims that the purchase agreement also conflicted with (1) an August 2001 oral agreement for the sale of the land between Donovan Dyrdal (Dyrdal's brother) and Dennis Baumert (a Golden Nuggets shareholder); (2) Baumert's subsequent statement to Donovan Dyrdal that the sale to Micke Pokel Farms was scheduled to close, at the latest, before the end of 2001 (rather than in February 2002); and (3) rumors that the sale to Micke Pokel Farms included a local-land exchange.
According to Dyrdal, these inconsistencies, along with suspicions that Narlock had denied Gregory Dyrdal the opportunity to exercise his right of first refusal to buy a different parcel of land, led him to believe that the purchase agreement did not accurately reflect all of the terms and conditions of Micke Pokel Farms's offer. Based on that belief, Dyrdal commenced the present action on August 19, 2001, and recorded a notice of lis pendens. Dyrdal took no steps to exercise his right of first refusal, either before or after commencing this action.
Golden Nuggets counterclaimed, alleging that by recording the notice of lis pendens, Dyrdal unjustifiably interfered with its contract with Micke Pokel Farms. Both Golden Nuggets and Dyrdal moved for summary judgment. Golden Nuggets included a request for bad-faith attorney fees within its motion, but it did not file and serve a separate motion seeking attorney fees. The court granted Golden Nuggets summary judgment dismissing ...