1 No . 115,819

IN THE COURT OF APPEALS OF THE ST ATE OF KANSAS

K EVIN W. T REAR , Appell ant /Cross

- a ppellee
,

v

.
S USAN J. C HAMBERLAIN , N ATHAN G OODELL , and J AMIE J ASNOSKI ,

Appell ees /Cross

- a ppellants

.

SYLLABUS BY THE COUR T

1. When there is no dispute about the facts, an appellate court is in the same position as the district court in ruling upon a motion for summary judgment.

2. Kansas adopted the Uniform Statutory Rule Against Perpetuities in 1992. It does not apply to future interests in land created before the effective date of the act.

3.
The common

- law rule against perpetuities directs that any future interest in land which does not vest within 21 years after the termination of a life in being is void.

4. A document should be interpreted, where feasible, to avoid the conclusion that it violates the rule against perpetuities.2

5.
The benefit of the right of preemption is personal to those who are granted the right in an agreement and does not continue to successor owners. The right ends when the last signatory dies or divests himself or his interest or otherwise waives the right, which
makes the int erest vest within the time period of the rule against perpetuities.

6. A right of refusal is an interest in land which is subject to the statute of frauds.

7. The statute of frauds only requires the material terms of a contract to be stated
with reaso nable certainty.

8. A right of refusal is a defined legal term. Under a right of refusal, when a seller forms the intent to sell the property subject to the right, an option contract between the seller and the holder of the right is formed. The holder o f the right may exercise the option contract and purchase the land, but if the holder does not exercise that right the

s eller is free to sell the land to anyone else.

Appeal from Lyon District Court; W. L EE F OWLER , judge. Op inion filed January 13, 2017

. Affirmed in part, reversed in part, and remanded with directions

.

Stuart N. Symmonds and Robert N. Symmonds
, of Symmonds & Symmonds, LLC, of Emporia, for appellant

/cross

- appellee

.

K aren K. McIlvain
, of Mc Il vain Law Office, LLC, of Madison, for appellee s/cross

- appellants.

B efore P OWELL , P .J., P IERRON and H ILL , J J

.3

H ILL , J .: The public policy in Kansas commands that land must not be tied up forever by ancient covenants. This policy is expressed in the common

- law rule against perpetuities which nullifies any contractual provision that tries to control land forever. Aware of this, and wanting to avoid the harsh result of contract nullification , modern courts frequently interpret contracts to create personal interests in real estate that are unique to the contracting party. Such interests cannot be passed on to all future generations and, thus, cannot violate the rule against perpetuities. We interpret the right of refusal provision in the 1986 real estate contract between Kevin W. Trear and Leonard and Susan Chamberlain to be the personal right of Trear that cannot be passed on to anyone else

.

Because the district court erroneously held that the rule against perpetuities
nullified the right of refusal provision of the real estate contract, we reverse and remand for further proceedings. We do, however, hold that the district court properly ruled that the same contract did, in its "description of adjoining land," satisf y the statute of frauds. We affirm that portion of the district court's ruling

.

We are in the same position as the district court

.
Because there are no disputes about the facts, we are in the same position as the district court in ruling upon this motion for summary judgment. See Martin v. Naik , 297 Kan. 241, 246, 300 P.3d 625 ( 2013).

Trear bought some real estate from the Chamberlain s in 1986 in Lyon County, Kansas. Trear was not represented by counsel and the Chamberlains' lawyer drafted the
contract. The right of refusal provision that is at the heart of the controversy in t his case

states:4 "6. The parties mutually agree that in the event the real estate presently owned by SELLERS [the Chamberlains] which is adjoining the real estate which is the subject of this Contract, is offered for sale by SELLERS, SELLERS shall extend unto PURCHASER [Trear] the first right of refusal to purchase said adjoining real estate at a price and upon terms mutually agreed upon by the parties. If the parties cannot agree, this right of first refusal shall lapse and thereafter be considered null and void."

In addition, the contract provided that it was "binding upon the heirs, legal representatives, and assigns of the parties hereto."

Leonard Chamberlain died in 2013. Later that year, Susan wanted to sell the adjoining real estate, subject to t he right of refusal provision. Chamberlain's lawyer wrote
a letter to Trear containing an offer by Chamberlain to sell the property for $289,000. The
letter stated that if Trear did not reply by November 12, 2013, it would be assumed Trear
did not want to purchase the real estate and Chamberlain's obligation under the right of refusal provision would be fulfilled.

The property Chamberlain wanted to sell was a 73

- acre tract that included the
house in which the Chamberlains had lived. Offering self

- serving statements in her
affidavit in support of summary judgment
, Chamberlain's daughter, Jamie Jasnoski, stated two companies had appraised the property. One s et the value at $299,000 and the other company s aid the property was valued at $275,000. However, nei ther company had a file on the appraisal. Trear neither accepted the offer nor made any counteroffer. After that, Chamberlain listed the real estate with Tri

- County Realty, wh ich advertised the property for sale at $295,000. Tri

- County Realty was unable to sell the property for the listed price. Trear never made an offer to Tri

- County Realty to purchase the property.

Shortly after she took the property off the market, Chamberlai n sold a 64

- acre tract which did not include the house, to Jasnoski and Nathan Goodell for $91,125

— a price considerably lower than that offered to Trear

. When he learned of the sale, Trear sued5

Chamberlain, Goodell, and Jasnoski to enforce his right of ref usal and to transf

er the property to him instead. Chamberlain, Goodell, and Jasnoski filed a motion for summary judgment.

In its summary judgment ruling, the district court found that the right of refusal provision, when read in combination with the bindi ng clause at the end of the contract, violated the rule against perpetuities. The district court ref rained from reforming the contract under the provision in K.S.A. 59

- 3405(b) permitting the court to make such
modifications because there was no petition be fore the court asking to modify the

contract. Trear asked the judge whether he would deny a petition if one was presented
and the judge stated: "[a]t this point. I'll be glad to have direction from the court of appeal's [ sic ] on this issue."

The court went on to hold that the right of refusal provision did not violate the statute of frauds because the meaning of "adjoining property" in the contract could be ascertained. Both parties appealed the summary judgment rulings.

Because this contract was cre ated before Kansas adopted the Uniform Statutory Rule Against Perpetuities, it does not apply to the future interest c reated by the contract
in this case. See K.S.A. 59

- 3405(a). Instead, t he common

- law rule against perpetuities does apply. That means any i nterest which does not vest within 21 years after the termination of a life in being is void. Barnhart v. McKinney , 235 Kan. 511, 5 16

- 17, 682 P.2d 112 (1984).

Four cases offer us guidance

.

Our view of this case is guided by what appears to be the clear evolution of the Supreme C ourt's application of the rule against perpetuities. We begin with a n older case
that ruled a contract violated the rule. The next three cases , all more recent, h e ld the6

contracts did not violate the rule. They demonstrate the co urt's growing reluctance to void

contracts.

The first case, Henderson v. Bell , 103 Kan. 422, 173 P. 1124 (1918), found there
was a violation of the rule against perpetuities . The offending pr ovision in that contract
stated

" ' should first parties elect to sell the following 40 acres now occupied by them, to wit:
The N.W. 1⁄4 of the S.W. 1⁄4 of Sec. 10

- 7

- 21, in Atchison county, Kan.

- the second parties shall have the right to purchase said last

- mentioned 40 at the agreed price of $65 an acre.

"It is further agreed that, if said parties elect to sell said S.W. 1⁄4 of the S.W. 1⁄4 of Sec. 10

- 7

- 21 at any time in the future, the first parties shall have the right to purchase same at the agreed price of $65 an acre, provided first parties will also buy the balance of the above

described land at the agreed price of $40 an acre. ' " 103 Kan. at 423

- 24.

Our Supreme Court expressly held that the language violated the r ule a gainst p erpetuities because "the Buchanans and those holding under them, either as assignees or heir s, would hold a right to obtain an interest in the property running for an indefinite period of time."
103 Kan. a t 42 4

- 25 . The Henderson court viewed the language "at any time in the future" to mean heirs and assignees could act under the right. The court also took issue with the $ 65 required sale price, because at the time of sale the land "may be worth $1,000 an
acre." 103 Kan. a t 42 4

.

The next cases all h e ld that the contract provisions did not violate the r ule a gainst

p erpetuities. In Crawn v. French
, 7 Kan. App. 2d 672, 646 P.2d 1158 (1982), a panel of this court held that when a preemptive right is personal to the buyer
, the r ule a gainst

p erpetuities is not violated. T he provision read:7 " ' The conditions of this option are that grantors shall retai n the exclusive use and enjoyment of this realty so long as th e y desire, but upon their election to move therefrom, to a new residence, they shall notify grantee at her place of employment or her residence, by mail, of their decision. Grantee will then hav e sixty (60) days within which to exercise this option to buy.

" ' Upon proof of receipt of mailing notice to Mary Ann French and her lack of exercise of this option within the sixty (60) day term, this exclusive right herein granted
will terminate and be h eld for naught. ' " 7 Kan. App. 2d at 673.

This court held that the contract language created a personal preemptive right in French and the preemptive right did not extend to French's heirs or assigns. 7 Kan. App. 2d at 674

- 75. Obviously, since that was a p ersonal right, it would expire at
French's death.

Next, in Barnhart , 235 Kan. 511, the court held a preemptive right did not violate the rule against perpetuities because the right was personal to the Barnharts, who were the sellers
, and would vest at the latest upon the Barnharts' death. The language of that provision read:

" 'S aid 5 acres are to be retained by Sellers as a site for a house trailer with the understanding that when Sellers decide to sell or vacate said 5 acres they wi ll first offer it to Purchasers at a price not to exceed $200.00 per acre plus the cost of any permanent improvements to the real estate that have a residual value. ' " 235 Kan. a t 512

.
It is important to note that i n Barnhart , the court stated: "[ A ] ' document should be interpreted where feasible to avoid the conclusion that it violates the rule against perpetuities. ' " 235 Kan. at 520; see Singer Co mpany v. Makad, Inc. , 213 Kan. 725, Syl. ¶ 6, 518 P.2d 493 (1974). In applying this rule, the court interp reted the contract language " ' to be retained by Sellers as a site for a house trailer ' " meant the burden of the preemptive right was personal to the sellers, and the Barnharts8

would necessarily " ' decide to sell or vacate ' " at the time of the last Barnhart who was a party to the contract died. 235 Kan. a t 519

- 20. Clearly with such an interpretation the contract did not violate the rule against perpetuities.

The court went on to distinguish Barnhart from Henderson because the triggering event in Henderson may never happen . B ut the triggering event in
Barnhar t , that is Lena Barnhart's death, is guaranteed to happen within the perpetuities time period. 235 Kan. a t 520

- 21. Barnhart's life is the "life in being" contemplated by the rule.

Our most recent case , Gore v. Beren , 254 Kan. 418, 867 P.2d 330 (1994), involved an agreement which gave cotenants a preemptive right . T he question arose whether that preemptive right violated the rule against perpetuities. The language in that contract stated:

" ' The partie s hereto further agree that should any party hereto desire to sell all or any part of his interests in either or both of said parcels of land, he shall promptly give written notice to the other cotenants with full and complete information concerning the

te rms of the proposed sale, and the other cotenants shall then have an option and prior right for a period of twenty (20) days after the receipt of said written notice to purchase the interest of the party desiring to sell said interest on the same terms and conditions which the selling party proposed to sell. . . . Any sale contemplated by this paragraph
shall refer to and mean a bona fide sale. ' " 2 54 Kan. a t 425.

Once again, the court held the benefit of the right of preemption was personal to those
that s igned the agreement and did not continue to successor owners. The right "ends when the last signatory dies or divests himself of his interest or otherwise waives the right," which makes the interest vest within the time period of the rule against perpetuit ies. 254 Kan. a t 435.9

We can see from this clear progression that the court is reluctant to follow the
harsh results of Henderson

. In Henderson , the preemption was at a fixed price which directly affect ed the alienability of the land. By alienability, we mean the ease by which
title to land can be transferred to someone other than the owner. In contrast, the contract
in Gore required a bona fide offer from a third party, so the contract did not affect the
land's alienability. Any sale would be at a market price where in Henderson , the sale price was fixed forever. Thus, the owners would be reluctant to sell at such a low price. The purpose of the rule against perpetuities is to avoid land being wasted by ancient
encumbrances. Land is more valuable if you can sell it. See Gore , 254 Kan. a t 429.

Applying these principles, we interpret Trear's contract provision as a personal right.

Mindful of the admonition of the Supreme Court to interpret documents so that they do not violat e the rule against perpetuities, we believe it is feasible to interpret this contract as a personal right granted to Trear to exercise the right of refusal to purchase this real estate. With such an interpretation, tha t right vests only in Trear and it exp ires with his death. Thus, the contract satisfies the common

- law rule against perpetuities.

T he provision making the contract binding on the heirs, legal representatives, and assigns, makes the contract binding upon Chamberlain 's heirs, legal representa tives, and assigns, as long as Trear is alive . The personal right extends to Trear and that is valid until his death. In order to enforce that right, the provision must be binding upon the Chamberlains' heirs, lega l representatives, and assigns in case the Chamberlains predecease Trear.

If we interpret this contract provision as the district court did
, we would not be following the guidance of our Supreme Court in Barnhart and Gore . Because our interpretation enforces the language of the contract, we reve rse the district court's10

summary judgment ruling that the right of refusal provision of this contract violated the rule against perpetuities.

The contract did comply with the statute of frauds.

A brief review of the statute of frauds is helpful at this point. A right of refusal is an interest in land which is subject to the statute of frauds. Barnhart , 235 Kan. at 5 23

- 24

. The statute of frauds provides:

"No action shall be brought . . . upon a ny contract for the sale of lands, tenements, or hereditaments, or any interest in or concerning them . . . unless the agreement upon which such action shall be brought, or some memorandum or note thereof, shall be in writing and signed by the party to be charged therewith . . . ." K.S.A.
33

- 106.

In order for the statute of frauds to be satisfied there must be a writing evidencing a

contract. K.S.A. 33

- 106

. One way to satisfy the statute of frauds is to have an oral contract memorialized in writing. See M West, Inc. v. Oak Park Mall
, 44 Kan. App. 2d 35, 44, 234 P.3d 833 (2010).

"'A memorandum, in order to be enforceable under the statute of frauds, may be any document or writing, formal or informal, signed by the party to be charged or by his lawfully aut horized agent, which states with reasonable certainty (a) each party to the contract either by his own name, or by such a description as will serve to identify him, or by the name or description of his agent, (b) the land or other subject matter to which t he contract relates, and (c) the terms and conditions of all the promises constituting the contract and by whom and to whom the promises are made.'[Citation omitted.]"
Barnhart , 235 Kan. at 524.11

The Supreme Court of Kansas has stated the statute of frauds only requires the material terms of a contract to be stated with reasonable certainty. Botkin v. Security State Bank
, 281 Kan. 243, 249

- 50, 130 P.3d 92 (2006).

Here, the first requirement of the statute of frauds is satisfied. The Chamberlains are the party to be bound, and the Chamberlains signed the contract.

Furthermore, we hold the statute of frauds is also satisfied in this case because the
real property can be identified, as the district court so found. Obviously, the right of
refusal provision in this contract incorporates the description of the land which was the subject of the 1986 sale to Trear. The property which was the subject of the contract

— Trear's lan d

— is adequately described in the contract. Trear's land is surrounded on the north side by a county road and on all other sides by the Chamberlains' land. There is no other land owned by the Chamberlains which could possibly be adjoining Trear's real

estat e. Thus, the description of the land subject to the right of refusal as adjoining real estate renders the land capable of identification. See Clark v. Larkin , 172 Kan. 284, 287, 239 P.2d 970 (1952).

We hold the district court correctly determined the st atute of frauds was not
violated . B ecause the party to be bound signed the contract, and the written description of
the land render ed it capable of being identified, the statute was satisfied. We affirm that portion of the district court's ruling.

Trear' s right of refusal was not voided

.

The district court also ruled that Trear's right of refusal was not voided by Trear's failure to act upon Chamberlain's first offer of the property to him. We think the district court correctly interpreted the contract to mean that when Chamberlain received an offer12

on the property, she must extend a chance to Trear to purchase the property at the price that the third party is offered.

A right of refusal is a defined legal term. Under a right of refusal , when a seller forms the intent to sell the property subject to the right an option contract between the seller and the holder of the right is formed. See Miller v. Alexander , 13 Kan. App. 2d 543, 552, 775 P.2d 198 (1989). The holder of the right may exercise the option contract and purchase the land, but if the holder does not exercise that right the seller is free to sell
the land. See Anderson v. Armour & Co mpany , 205 Kan. 801, 80 4

- 05 , 473 P.2d 84 (1970).

The plain language of this contract states that Trear has a right of refusal

. "SELLERS shall extend unto PURCHASER the first right of refusal to purchase . . . ."

When Chamberlain first offered the entire tract of land to Trear for $289,000
, there had been no offer from anyone to buy the property. She then turned around and sold

most of the property to Jasnoski and Goodell for 1/3 of that price. Trear never had an opportunity to buy the land at that price. Thus, he was denied his right of refusal.

This price discrepancy raises questions concerning the good fait h of Chamberlain. The record does not conclusively show if the parties were acting in good faith. This is a question of material fact which also makes it appropriate to deny summary judgme nt to Cha mberlain on this issue.

Affirmed in part, reversed in par t, and remanded for further proceedings.