### TEXA S C OU R T OF A PPEAL S, THIR D DIST R ICT , AT AU STIN

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St ar te x F ir stEquipm e nt , Lt d. , App e lla nt

v. Aelina En ter prises, Inc. , Appellee

444 444 444 444 444 444 444 444 444 444 444444444 444 444 444 444 444 444 444 444 44 FROM THE DISTRICT COURT OF TRAVIS COU NTY, 201ST J UDICIAL DISTRI CT NO. GN304793 , HONO RABLE PETER M. LOWRY, J UDGE PRESIDING

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O P I N I O N This appea l arises out of a dispute re gar ding the owner ship of a .384-a cre trac t of
commerc ial rea l property

in Ba strop County
. Appellant Startex F irst E quipment, L td., appea ls the tr ia l c ourt ’s summa

ry jud g me nt i n f

avo r o f a pp e lle e Ae lin a

En te rp ri se s, I nc ., g ra

nti ng Ael in a titl e to the proper

ty
. I n two issues, Startex contends that the t rial cour t erre d in gr anting Aelina’ s motion fo r s umm ary

jud g me nt and den yingStart e x’s m oti on fo r p art ia l summa

ry jud g me nt. B e c a

us e Startex’s right of first ref

usal survived pre vious sales of the pr operty and wa s superior to Ae lina’s p u r c h a s e o p ti o n , w e r e v e r s e th e d is tr ic t c o u rt a n d r e n d e r ju d g me n t i nf

a v o r o f St arte x.
F ACTUAL AND P ROCEDURAL BACK GR OUND This case involves a dispute over a rig ht of first re fusal. In 1970, the Wilhelms , the
own ers of th e .3 84 -acre tr act , ent ered in to a L ease andOpe rat in g Agreemen t ( "L ease Agreem ent ")2

with Pioneer Oil Company to operate a ga soline pumping station on the prope rty . Section 14C of the L e a se Ag re e me nt g ra

nte d to Pio ne e r a

ri g ht o f f ir st r e fu sa l. It pr ov ide s in re le va nt p art :
I f, duringthe term of this lea se, or a n y renewal ther eof, le ssor rec eives a bonafide offe r to purcha se the pre mises which offe r less o r wi shes to acc ept, lessor shall be obligated first to no tify

lessee in wr iting of suc h offe r, and le ssee sha ll then have se ve n da y s fr om the re c e ipt of su c h wr itt e n n oti c e in whic h to e xer c ise le sse e ’s fi rs t ri g ht o f p ur c ha se or

re fu se to p ur chas e th e premise s at sa id o ff e re d p ri c e , a

nd on ly afte r the e x piration of said seve n-day period c an lessor pr ocee d to ac ce p t the offe r and sell the pre mises to such orig inal bonafide offe ror, and then such sale shall be subject to the terms of this lease or any re newal thereof. (Emphasis adde d.)

Duri ngthe te rm

of the L e a se Ag re e me nt, the pr op e rt y wa s so ld b y

the Wilh e lms ’
succe ssors, the J oneses, to the Eg leson s in 1979, and by the Eg lesons to Kathy

Favoccia in 1987. I n 1 99 6, Kathy

F avo c c ia , th en own e r o f t he pr op e rt

y , e nte re d into a

Re ta il St or e L e a se /Purc ha se Contract with Aelina, a llowing it to run the c onvenienc e store on the proper ty . The R et ai l Store L e a s e / P u r c h a s e C o n t r a c tg r an t e d A e l i n a ano p t i o nt o p u r c h a s e t h e p r o p e rt y. I n 2002, Startex purchased Pionee r’s intere st in the L ease Ag ree ment and re ceive d an express written a ssignment f rom Pioneer. S ection 14D of the L ease Ag ree ment g ave Pionee r the rig ht to “assig n its operation on the pre mises.”

I n May 2003, Favoccia

and Ae lina enter ed into an earne st money contra ct for the purc ha se of

the pr op e rt

y in t he amou nt o f $ 24 0, 00 0. F a vo c c ia no ti fi ed S tart e x of t

he c on tr a c t,

“ purs ua nt to pa ra g ra ph14 C of

the [L e a se and

Op e ratin g ] ag re e me nt. ” I n a le tte r s e nt t o F a vo c c ia in Jun e 20 03 , S tar tex “ fo rm a lly and a ff ir mativ e ly e xer c ise [d] its ri g ht o f p ur c ha se of the pr op e rt

y
un de r Pa ra g ra ph 14 C of the L e a se Ag re e me nt, on the same te rm s” a s th e of

fe r f ro m A e lin a . O n July3

29, 2003, Startex purcha sed t he prope rty from F avocc ia and r ece ived a g ener al war ranty deed. O n J uly 31, 2003, Aelina notified Startex that it was attempting to purcha se the prope rty from Startex by e xer c isi ngthe purc ha se op tio n it a c qu ir e d f

ro m F a vo c c ia

in i ts R e ta il St or e L e a se /Purc ha se C o n t r a c t
. S t art e x d i s p u t e d A e l i n a ’ s r i g h tt o b u y t h e p r o p e rt y an d h a s d e c l i n e d

t o s e l l t h e p r o p e rt y. Aelina f iled suit in Travis County district court see king spe cific pe rfor mance of the land purc hase c ontrac t and, alter natively , damag es for brea ch of c ontrac t. The cour t gr anted Ae lina summary judgme nt, specify

ing in the or der the basis for its ruling . The c ourt found,

• Pioneer’s r ight of

first ref usal in the L ease Ag ree ment expired befor e it assig ned its int e re st t o St art e x. Th e re fo re , St art e x did not a c qu ir e a ri g ht o f f ir st r e fu sa l;

• Ae lin a

re c e ive d a

va li d purc ha se op tio n in its Re ta il St or e L e a se /Purc ha se Con tr a c t w ithKathy

F avo c c ia no t su bje c t to any

ri g ht o f f ir st r e fu sa l;

• Start e x took

tit le to t he pr op e rt

y su bje c t to the ob lig a tio ns of Kathy F a vo c c ia under the valid Aelina pur chase option;

• Start e x is c omp e lle d to pe rf or m thos e ob lig a tio ns by

c on ve yingle g a l ti tle to Aelina upon the te rms and conditions of Ae lina’s prope rly exercised option.
Th e tr ia l c ourt

de nie d Start e x’s mot ion fo r summa ry jud g me nt, wh ic h s ou g ht u ne nc umb e re d ti tle to the pr op e rt

y and a de c laratio n th a t S tar tex had no ob lig a tio n to se ll the pr op e rt y to A e lin a . T his appea l followed.
AN AL YSI S The Cont ro v e rsy Startex arg ues that the rig ht of first re fusal sur v i v ed t wo previous sale s of the pr op e rt y , fro m th e W ilhe lms ’ s uc c e sso rs , th e Jone se s, to t he Eg le so ns , a

nd fr om t he Eg le so ns toThe pa rties ag ree that notice is not an issue her e. 1 4 Kathy F a vo c c ia . T o s up po rt

its argume nt, Start e x points t o th e lang ua g e in 1 4C that r e a ds , “ on ly afte r the e x piration of said seve n-day period c an lessor p ro ce ed to ac cept the of fer and sell the premises to such or igina l bonafide offe ro r, and the n s uc h s alesh all besu bje c t to thete rm s o

f th is lease or any re newal thereof .” (E mph a sis a dd e d. ) Sta

rt e x a rgue s th a t be c a

us e the pr op e rt

y wa s so ld “subjec t to the terms” of the L ease Ag ree ment, and one of the terms of the L ease Ag ree ment was the ri g ht o f f ir st r e fu sa l, t

he ri g ht o f f

ir st r e fu sa l surv ive d th e pr evi ou s sa le s. Th is i nte rp re tatio n is
c o n f ir me d , St arte x s u

b mi ts , b y F av o c c ia ’ s n o ti f ic a ti o n a n d e v e n tu a l s a le o f th e p r o p e rty to St arte x, “pursua nt to parag raph 14C of the [L ease and Ope rating ] ag ree ment.” S tartex further c ontends that rig hts of first ref

usal are assig nable, and that the i nstant rig ht of first refusal wa s proper ly assig ned by Pio ne e r t o St art e x an d wa s ava ila ble to S tart e x whe n A e lin a and F a vo c c ia e nte re d into t

he ir
e arn est mo ney c on tr a c t. S tart e x cla ims tha t it s su rv ivi ngri g ht o f f

ir st r e fu sa l pr e date s, and is superior to, Ae lina’s purc hase option. Startex further asks the c ourt to strike down, as inequitable , Ae lin a ’s su

bs e qu e nt atte mpt to “thw art ” Sta rt e x’s pr ior ri g ht o f f

ir st r e fu sa l, whic h St art e x cla ims Aelina did by contra cting with F avocc ia for less than the price of the option, t ri gger i n g Startex’s ri g ht o f f ir st r e fu sa l, a

nd the n atte mpt ingto e xer c ise its purc ha se op ti on to pu rc ha se the pr op e rt

y f r o m S ta rte x. Aelina c ont en d s t h at Startex did not acquir e a r ight of first ref usal from Pioneer beca use Pioneer’ s rig ht expired when it elec ted not to exercise its rig ht to purchase the prope rty afte r
rec eiving notice of two diff ere nt of fer s to se ll. Aelina f

urther c ontends that in 1987, the Eg lesons 1We will not address this contention beca use there is no evidenc e of this relationship i n the 2 rec ord. Be cause Aelina doe s not include this argument in its m otion for summary judgme nt, we 3 will not consider it. Se e City of H oust on v. Cl ear Cre e k

Ba sin Au th
. , 5 8 9 S. W. 2 d 6 7 1 , 6 7 7 ( T e x. 1979). 5 so ld the pr op e rt

y to Kathy and L arr

y F avo c c ia , the ir da

ug hte r an d s on -i n- law, wh ic h w ou ld i mpl ic a te
a sec tion of the lease specific ally conce rning prop erty

sales to a lessor ’s childre n. Aelina a rg ues 2 that, b e c a us e on ly its ri g ht e xists , S tar tex ’s de e d is vo id, its su pe ri or ity argume nt f

a ils , a nd its
e qu iti e s a rgume nt i s ir

re le va nt. Ae lin a

als o co nte nd s th a t th e L e a se Ag re e me nt d id n ot e xpre ssl y pr ov ide that Pio ne e r’ s r ig ht o f f ir st r e fu sa l w a s a ssi g na

ble
. I n the a lte rn a tiv e , A e lin a argue s th a t if 3 the cour t finds that Pioneer’s rig ht of first re fusal did not expire and that Startex’s de ed is valid, then Startex t ook title of the proper ty subject to Aelina’ s 1996 lease a nd the purc hase option there in.
Stan dard of Revie w

Both pa rties fi led motions for summary judgme nt. Aelina as pla intiff moved for
summ ary ju dg me nt o n th e g ro un ds that th e un c on tr ov e rt e d e vid e nc e sh ow e d th a t th e ri g ht o f f ir st ref usal expired before P i o n ee r sold its i ntere st in the property to Startex . Startex’s mot ion for summary judgme nt disputes the expi ration of the rig ht of first re fusal, cla iming that the undisputed fac ts and the unambiguous L ease Ag ree ment and other documents show that the rig ht of first re fusal survived pre vious sales as a matter of law
.

We re vie w the dis tr ic t c ourt ’s summa ry jud g me nt de novo
. ValenceOperating Co.

v . D or se tt , 16 4 S .W .3 d 656, 66 1 ( Te x. 20 05 ); Pr ov ide nt L ife& Ac c ide nt I ns . Co . v . Kn ott , 1286

S.W .3d 211, 215 (Tex. 2003). A m ovant has the burden of showing t hat t here is no g enuine issue of materia l f

act and that it is entit led to judgme nt as a matter of law. Nixon v. Mr. Prop. Mgm t. Co. , 690 S.W .2d 546, 548 (Tex. 1985). When revie wing a traditional summary judgme nt, we assume that all evidenc e fa

vorable to the non-movant is true and indulg e eve ry rea sonable infe renc e and r esolve all doubts in favor of the non-movant. Id. at 548-49. When, as here , both parties move f or summary judgme nt and the district cour t gr ants one motio n an d d enies the other, we r eview the summary judgme nt evidence prese nted by both s i d es, dete rmine all questions prese nted, and r ender the judgme nt the d istrict court should have r ender ed. Texas W orkers’ Comp. Comm’n v. Patient Advoc ates of Tex. , 136 S.W. 3d 64 3, 64 8 (T e x. 20 04 ); FM Pr op s. Op e ra tin g Co. v . Ci ty of A us tin , 22 S.W .3d 868, 872 (Tex. 2000). The Right

of First R efusal The thre shold question is whether the r ight o f fi rs t ref usal in the L ease Ag ree ment
s u rv i v edt h e p re v i o u s s al es o f t h e p ro p er t y . C i t i n g Comeaux v. Suderman, Ae lin a c la ims that r ig hts of fi rs t r e fu sa l e xpir e if

the y are no t e xer c ise d. 93 S.W. 3d 21 5, 22 3 ( Te x. Ap p. —H ou sto n [14th Di st. ] 200 2, no pe t.)
. Com e a ux wa s a le sse e of a on e -a c re lot wi th a ri g ht o f f ir st r e fu sa l to purc ha se the prope rty
. Id. at 217. When the l essor of the property ag ree d to sell thirty -five a cre s, including Comeaux’s lot , to a prospec tive buy er, the lessor did not provide Comeaux with the details of the deal or a copy of the e arne st money

contra ct. Id. Com e a

ux a ssume d th a t th e sa le inv ol ved on ly twenty -two ac res surr ounding his prope rty and did not further inquire about the sale befor e dec iding not to ex erc ise his option. Id. a t 2 1 8
. C o m e a u x l a t e r f i l e d s u i ta g a i n s tt h e o w n e r s o f t h e p r o p e rt y,7

c h ar g in g th a t t

h e y f a il e d to c o mp ly

w it hth e te r ms o f h is r igh t of first ref

usal. Id. Aelina c ites Comeaux for the br oad proposition that, “once Comeaux af firmatively

declined to e x erc ise his rig ht afte r re ceivingnotice and a n opportunity

to assert his rig ht to purchase the l ea s ed premises, the option ex pired.” Id. at 223.

We do not

a g re e that Comeaux

is disposi tive of the issue he re. Comeaux sp e c if ic a lly
re so lve d a

qu e sti on of a de qu a te no tic e , h old ing that w he n a pr op e rt y ow ne r m a ke s a

re a so na ble disclosure to the holder of a rig ht of first ref usal of the ter

ms of a propose d sale, the r ight holder has a duty to undertake a re asonable investigation of any terms unclea

r to him. Id. at 221. The Comeaux
c ourt fu rt he r h e ld t hat w he n the ri g ht hol de r re c e ive s noti c e and is g ive n th e op po rt un ity to e xer c ise his right of

first ref usal, technic al def

iciencie s in the notice cannot revive the rig ht that was dec lined. Id. at 222. While that issue of adequate notice wa s disposit ive in Comeaux , it is not here
.

Additionally , the rig ht of first re fusal in Comeaux lacks the disputed lang uag e of the provision i n t h e i n s t an t case . See id. at 217. Rights of f irst refusa l are barg ained- for c ontrac tual provisions, and their scope must be determined by interpre ting the contra ctual langua g e at issue. See 3 E ri c Mil ls H olm e s, Cor bin on Cont ract s § 11 .4 (Jos e phM. Pe ri llo , e d. , 1 99 6) . T he sp e c if ic wording used in the L ease Ag ree ment makes its int erpr etation a matter of first impression. See id. (“Word s th a t a

r e u s e d in a c o n tr a c t t

r an s a c ti o n. . . mu s t i nc a s e o f d is p u te b e inte r

p r e te d befor e de te rm ini ngthe le g a l r e latio ns of the pa rt ie s. ” ); c f. Ga llu p v . S t. Pau l I ns . Co ., 515 S.W .2d 249, 250 (Tex. 1974) (“I

n construing a contra ct, the thing of first importance is the lang uag e of the contra ct itself.”).8 We look to the tex t of the L ease Ag ree ment to a scer tain the meaningof its rig ht of fi rs t re fu sa l pr ov isi on . Whe n c on str uin g the L e a se Ag re e me nt, we mus t a sc e rt a in and g ive e ff e c t to t h e p arties’ intentions as ex presse d in the document. See F rost Nat ’l Bank v . L&

F Distribs ., 165 S.W. 3d 31 0, 31 1 ( Te x. 20 05 ). “ ‘I f t he wr itt e n in str

ume nt i s so wo rd e d th a t it c an b e g ive n a

c e rt a in or def inite leg al meaningor interpr etation, then it is not ambiguous and the court will construe the
co n t ra ct as a

matter of la

w.’” SA S I

ns t., In c . v . B re ite nfe ld , 1 6 7 S. W. 3 d 8 4 0 , 8 4 1 (Tex. 2005) (q u o t i n g Coker v. Cok

er , 650 S.W .2d 391, 393 (Tex. 1983)). We consi d er t h e entire writing and attempt to ha

rmonize a nd g ive eff

ect to a ll the provisions of the contra ct by analy zing the provisions with ref ere nce to the whole ag ree ment. Frost Nat’l Bank, 16 5 S. W.3 d at 31 2. We c on str ue c on tr a c ts from a utilitarian standpoint bea ring in mind the particular business activity soug ht to be serve d. Id. The L ease Ag ree ment is co mposed of 22 number ed sec tions, of which the rig ht of first ref usal is included in section 14, titled “Additional Ter ms.” Included in t h i s s ection are five unrelated provisions, lettered Athroug h E, of which the rig ht of first re fusal is letter C.

The plain text of 14C creates a rig ht of ref usal that survives sales of the proper ty . The disputed lang uag e of the provision subjects t he sale of the prope rty “to the ter

ms of this lease or a

ny
rene wal ther eof.” I f the prope rty is sold “subject to the terms” of the L ease Ag ree ment, and one of the terms of the L ease Ag ree ment is the rig ht of first re fusal, then the r ight of first ref usal survives
a ll sa le s of the pr op e rt

y . Th is int e rp re tatio n is bo lst e re d by the pla c e me nt o f t

his “ surv iva l te rm ” in the rig ht of first re fusal provision.

Wit h a similar rationale, our sister c ourt in Dallas held that a rig ht of first re fusal pr ov isi on did no t e xpir e the fi rs t ti me the ri g ht hol de r ch os e no t to inv ok e it a nd that it c on tin ue d to9

apply to eac h quali fy i n g offe r the prope rty owner rec eived. See 6500 Ce dar Springs L .P. v. Collector Antique, Inc. , No. 05-98-00386-C V, 2 0 00 Tex. App. L EXI S 5583 (Tex. App.—Dallas Aug ust 21, 2000, no pet.) (mem. op.). A lthough the c ontrac tual lang uag e at issue was unique to the
case , see id. at *1-2, the c ourt interpre t ed a p ro v i s ion requiringthe owner or his transf ereeto pe rf or m a ll the te rm s, c ov e na

nts , a nd c on dit ion s o f t

he c on tr a c t to m e an th a t th e ri g ht o f f ir st r e fu sa l, as a te rm of the c ontrac t, continued with eac h succe ssor to the lease
. Id. at *9. The contrac tual langua g e re g ard ingthe tr ans fe re e ’s ob lig ati on s w a s p la c e d in se c tio n 1 7. 1 o f t

he c on tr a c t, n ot i n section 33, which pertained to the rig ht of first re fusal. Id. The fa cts in the instant case , there fore , weig h more he avily

in favor of

the survival of the rig ht o f fi rs t refusa l beca use the dispositive lang uag e is locate d in the text of the provision itself.

Although the proper

ty was sold from the W ilhelms to the Eglesons t o the Fa voccia s duri ngthe pe ri od

of Pio ne e r’ s r ig ht o f f

ir st r e fu sa l, e a c h s a le wa s e xpre ssl y ma de su bje c t to the te rm s of the L e a se Ag re e me nt. Becaus e th e ri gh t of fi rs t r e fu sa l w a s o ne of

the te rm s o f t

he L e a se Ag re e me nt, it s ur

viv e d th e sa le s o f t

he pr op e rt

y and wa s in fu ll f or c e and e ff e c t w he n F a vo c c ia soug ht to sell to Ael i n a. Fa voccia ref ere nced Star

tex’s right of f

irst refusa l in a letter notifying S t ar t ex o f F av o cc i a’ s co n t ra ct wi t h Ae l i n a, “p u rs u an tt o p ar agr ap h 1 4 C o f t h e [ L ea s e a n d Op er at i n g] ag ree ment.” In the letter, F avocc ia’s attorne y wrote, “ Pursuant to this agr eement, one of you [Pion e e r o r S tart e x] has se ve n d ay s f ro m r e c e ipt

of wr itt e n n oti c e in whic h to e xer c ise a ri g ht o f f ir st
re fu sa l.” Start e x sub se qu e ntl y e xer c ise d it s r ig ht of pu rchase un de r P ara g ra ph14 C of

the L e a se Ag ree ment and purc hased the proper ty from F avocc ia for $240,000, the price offe red by Aelina.10 Ae lin a c on te nd s th a t, i f t

he ri g ht of fi rs t r e fu sa l di d n ot e xpir e and Sta rt e x’s d e e d is
va lid , St art e x took title to t he pr op e rt

y su bje c t to Ae lin a ’s purc ha se op tio n, wh ic h it a c qu ir e d in 1996. We disag ree . The cases consistently hold that a purchaser , with notice of a previously

g iven option, take s subject to the rig hts of the optionee. Bu rfo rd v . P ou nd e rs , 1 9 9 S. W. 2 d

1 4 1 , 1 4 2 ( T e x. 1947); Herman v . Shell Oil Co. , 93 S.W .3d 605, 608 (T ex . Ap p . — Ho u ston [ 14th Dist.] 2002, no pet.). Although t he parties do not cite us t o any case law re g ardinga rig ht of first re fusal compe ting with an option and we f

ind none, we be lieve the r easoningof Burford applies her e and w e find
su pp or t f or thi s v ie w i n a

tr e a tis e on

the su bje c t. I n Bu rfo rd , th e ow ne r of the pr op e rt y g a ve B ur fo rd , th e le sse e , a n o pti on to p ur c ha se land for the duration of his t wo-y ear lease
. Bu rfo rd , 199 S.W .2d at 142. The owner the n sold the proper ty to Pounders five months befor e the lea se ex pired, while Burf ord wa s in possession of the land and usingit for a g arde n and pasture
. Id. The c ourt found that P ounders had constructive notice of the c ontents of the lease at the time he rec eived the deed beca use he was told by

the owner

that Bur ford wa s in possession of the proper ty and bec ause the re w ere visible circumstanc es conf irming this fact. Id. The c ourt deter mined that Pounders was not a n innocent purcha ser f

or value and that he wa s in no better position than his gr antor to def end ag ainst Bur ford’ s lawsuit. Id. Fr om the rea soning of Burford, it follows that an option holder, with notice o f a previously g iven rig ht, ta

kes subject to that r ight. Simi lar to the optionee in Bu rfo rd , the holder of the previously g iven right, who has paid consideration there for, is entitled to rely on his rig hts. One commentator obse rved,11

The [option-holding] tenant may find that [hi s] purc hase option is not an unalloy ed benef it. I f, when the lease is made, the landlord’ s titl e is enc umbere d or flaw ed, the te n an t c an a c qu ir e n o b e tt e r ti tl e . . . . T h e le a s e an d o p ti o n ma y b e c u t off by enfor ceme nt of a para

mount interest. .
. . Acc ording ly , the t enant cannot rely on the option for any

serious purpose unless he satisfies himself with the condition of the landlord’s title befor e ente ring the l ease and then rec ords t he lease, or a memorandum of the lea se, with the option included.
2 Milton R . Fr iedman, F riedman on L ease s, § 15.101 (3d ed. 1997)
.

I n the instant case , the rig ht of first re fusal invoked by Startex was gr anted to Pioneer in 1 97 0 a nd fi le d o f re c or d. Ae lin a ob ta ine d its op tio n tw e nty -s ix y e ars late r, su bje c t to that r ig ht. Alt h oug h Aelina maintains that it was not aw are of the prior rig ht of first re fusal until it bega n neg otiations to purchase the proper ty from F avocc ia in 2002, an y p ro p er inquiry would have disclosed this adver se right. Since t he L ease Ag ree ment was recor ded and available for inspec tion, Aelina is c harg ed with c onstructive notice of its contents. See Strong v . Strong, 98 S.W .2d 346, 348 (Tex. 1936); Herman , 93 S.W .3d at 608. Addit ionally , Aelina is cha rg ed with inquiry

notice of the L e a se Ag re e me nt b e c a

us e it w ou ld h ave be e n a

pp are nt fr om a re a so na

ble ins pe c tio n of the pr op e rt y th a t a s e p ar a te e n ti ty

w a s c o n d

u c ti n g g a s o li n e s a le s. S ee S t r o ng v. Strong, 98 S.W .2d at 348; Herman , 93 S.W .3d at 608. I f A e lin a ha d inve sti g a te d th e arr ang e me nt b e tw e e n F a vo c c ia and thi s entity , whether i t wa s P i o n eer or Startex, it would have discovere d the L ease Ag ree ment. See Herman , 93 S.W .3d at 608.

Startex’s right pre -date d Aelina’ s rig ht, and was supe rior to Aelina’ s option. Aelina did no t ov e rr ide Start e x’s p re e xistin g ri g ht o f f ir st r e fu sa l by

fi rs t c on tr a c tin g wi th F a vo c c ia fo r l e ss12

tha n th e pr ic e of

the op tio n, tr ig g e ri ngStart e x’s r ig ht o f f ir st r e fu sa l, a

nd the n e xer c isi ngits purc ha se option at the option price.
CO NC LU SION

Be cause Startex’s right of f irst refusa l survived the pre vious sales of the property and was super ior to A elina’s purcha se option, we re verse the district court a nd rende r judg ment in favor
o f St arte x.

__________________________________________ J an P. Patterson, J ustice Be fore J ustices B . A. Smith, P atterson a nd Pury ear Reverse d and Rende red Filed: Apr il 14, 2006