No. 92-607 IN THE SUPREME COURT OF THE STATE OF MONTANA 1993

IN THE MATTER OF THE ESTATE OF FRED PELZHAN, Deceased.

APPEAL PROM: District Court of the Ninth Judicial District, In and for the County of Teton, The Honorable R. D. McPhillips, Judge presiding.

COUNSEL OF RECORD: For Appellant: Greg A. Luinstra, Jardine, Stephenson, Blewett & Weaver, Great Falls,Montana For Respondent: R. L. "StoneyW Burk, Choteau, Montana; John P. Wuerthner, Great Falls, Montana

Submitted on Briefs: July 20, 1993Justice Fred J. Weber delivered the Opinion of the Court.
This is an appeal from an order of the Ninth Judicial District, Teton County, determining that Joe and Floie Lee (the Lees) have waived their right of first refusal to the sale of the Pelzman ranch for a price of $120,000,and approving the sale of the same property to Cloyd and Lloyd Stott. We affirm. We consider the following issues on appeal: 1. Did the District Court err in determining that the Lees waived their right of first refusal to the Pelzman ranch? 2. Did the District Court err in returning $120,000 tendermoney to the Lees and substituting a Bank Letter of Credit? This is the second appeal of this action. This appeal revolves around the sale of a ranch in Teton County. The Lees moved to the area in 1977 and began operatingan 800-acre ranch for Fred Pelzman (Pelzman) under a lease/management arrangement. Pelzman had suffered a stroke at age 80 and was unable to manage the property himself On March 20, 1978, Pelzman and the Lees executed a written agreement which contained the following language: 

### I,Fred Pelzman, Sr., agree to give Joe R. and Floie N. Lee first option topurchaseproperty 

### Iown in the above legal Description upon or before my passing for the sum of onehundred and twenty thousanddollars. It is agreed by the undersigned that the option holders will reside and maintain the said property until time of sale. A ledger of time and improvements will be kept for the purpose of reimbursement by the landowner. Upon notification of intent to sell, a period of 45days will be allowed for payment. The Lees remained inpossession and currently remain inpossessionof the ranch. Mr. Pelzmandied onMay 18, 1986. The Lees notified the attorney forthe Pelzmanestate that theywere exercising their option to buy the ranch under the above clause. The estate representative refused to sell. The Lees filed a district court action for specific performance. Upon appeal, this Court determined that the agreement did not constitute an "option contractwbut did constitutea "rightof first refusal1* which could entitle the Lees to buy the Pelzman ranch for $120,000. In substance this Court determined that the right of first refusal became operable when the estate notified the Lees the ranch was for sale. Leev. Shaw (1992),251Mont. 118, 123, 822 P.2d 1061, 1064. Shortlyafter the foregoing appealwas final,the Lees through their attorney entered into extensive sale negotiations with the personal representative of the Pelzman estate. During these negotiations the Lees attempted to settle all pending claims between them and the estate, and intended to include both the purchase of the ranch property and the purchase of the ranch cattle. The parties agreed to the basic price of $200,000with $120,000 allocated to the ranch and $80,000 to the cattle. While

none of the various proposed contracts was signed by all of the parties, agreement was reached to complete the sale on a specified closing date. The Lees failed to show up for that closing and requested extensions. The Lees failed to show up at subsequent extensions. As a result,the estate representative entered into a purchase and sale agreementwith Cloyd and Lloyd Stott (the Stotts) for the sale of the Pelzman ranch for $165,000 and sought courtapproval of that agreement. On July 21, 1992, a hearing was held on the petition regarding the Stott purchase. Lees filed an objection to the sale based upon their right of first refusal. They contended that the Stotts' offer of purchase brought their right of first refusal into existence and they offered to purchase for $120,000. While the District Court agreed that the Stotts' offer had ripened the Lees' right of first refusal, it found that the Lees had waived their right of first refusal when they failed to show up at the closings for the sale of the property. The Lees argue they had not reached final agreement with the Pelzman estate on the purchase of the property and therefore had not waived the right of first refusal. The Pelzman estate contends that the court was correct in finding waiver because the Lees had successfully negotiated a sale and then failed to show up at the closing for such sale. I Did the District Court err in determining that the Lees waived their right of first refusal to the Pelzman ranch? In Lee v. Shaw, this Court determined that the above quoted language of the agreement constituted 

### a right of first refusal to the sale of the Pelzman ranch. 

### Lee, 251Mont. at 123, 822 P.2d at 1064. 

### A "right of first refusal11 or preemptive right doesnot give to the preemptionerthepower to compel anunwilling owner to sell- -it merely requires the owner,when and if he decides to sell, to offer the property first to the person entitled to the preemption at the stipulated price. &&, 251Mont. at 121, 822 P.2d at 1063. The record indicates that negotiations for the sale of the 4Pelzman ranch began in earnest during February of 1992. On February 27, 1992, the Lees made a $200,000 offer for the ranch, the ranch cattle, and other considerations. The consent of all heirs for the $200,000 sale price of which $120,000 was for the Pelzman ranch itselfwas given onApril 8, 1992. We stated in

### Lee: [Hlad such notificationof intent been aivenbv the P.R. Jwersonalrewresentativeof the estate1 to theLees, they had the right to purchase the property for the $120,000 less any credits as indicatedby the agreement from the ledger, with payment to be made within 45 davs from notification. (Emphasisadded*) 

### Lee, 251 Mont. at 123, 822 P.2d at 1064. The necessary notification from the estate's attorney came on April 8, 1992 when he notified the Lees' attorney that all heirs had now agreed to the sale and that $120,000 of the $200,000 selling price should be allocated as the price of the land. From this date, the 45 day period began to run. That period ended the end of May 1992. Yet, the closing was not set until July 1, 1992 and despite

assurances fromthe Lees1attorney that they would appear,the Lees did not showup. Nor did they appearafter being granted a twentyfour hour extension to 4 p.m. July 2, 1992. Another extensionwas sought to August 1, 1992. In the meantime, the Stotts offered $165,000 for the ranch and the estate sought a judicial determinationof the appropriateness of the estate's acceptance of this offer. At the July 21, 1992hearing inwhich the court considered the Stott offer in light of the surrounding circumstances, the Lees gave notice theywould exercise their right of first refusal tobuythe ranch for $120,000. Following the hearing, the District Court determined that the Leeshad waived their right of first refusalby failing to show up at the closing. However, the District Court determined that it was the subsequent offer by the Stotts which triggered the Lees' preemptive right and began the running of the 45 day period. While the District Court correctlydetermined that the Leeshad waived their right, it did not correctly determine the triggering incident. We will affirm a district court when its conclusion is correct,regardlessof whether the court has used the correct analysis to reach that conclusion. Shimskey v. Valley Credit Union (1984), 208 Mont. 186, 676 P.2d 1308. Waiver is an equitable doctrine, applicable where there is intentional orvoluntary relinquishmentof aknownright,claim,or privilege, or such conduct aswarrants inference of relinquishment of such right. Sperry v. Montana State University (1989), 239 Mont. 25,778 P.2d 895. We conclude that the Lees failed to tender the sum of $120,000within a period of 45 days from receiving the notification of intent to sell, and as a result failed to comply with the specific requirements of the above quoted contract provision. We also conclude the record supports the determination of the District Court that the Lees failed to show up for the closing of the sale by the estate personal representative on two differentoccasions. We further conclude that such conduct on the part of theLees constitutesan intentionalrelinquishmentof their right of first refusal and constitutes a waiver of that right. We hold the District Court correctly determined that the Leeswaived their right of first refusal to the Pelzman ranch. Because of this dispositive issue, we need not consider the Lees' other issues. 11. Did the District Court err in returning $120,000 tender money to the Lees and substituting a Bank Letter of Credit? While legal questionsexist as to thepropriety of the conduct of the District Court in allowing a substitution of a letter of credit for the $120,000 purchase price tendered by the Lees, in view of our holding in this case, we do not find it necessary to consider such issues. We note that the letter of creditwhich has been substituted by the Lees provides that the credit expires 30 days after this matter is remanded by this Court to the Teton County Clerk of Court's office. As a result, no further action is required on our part. Affirmed.

fNovember 10, 1993 CERTIFICATEOFSERVICE Iherebycertifythat thefollowingorderwas sentby United Statesmail,prepaid, to the followingnamed: GregA. Luinstra,Esq. Jardine,Stephenson,Blewett&Weaver P.O.Box2269 GreatFalls,MT59403-2269 R.L. "Stoney"Burk AttorneyatLaw P.O.Box70 Choteau, MT 59422 JOHNP.WUERTHNER AttorneyatLaw P.O. Box2503 GreatFalls,MT59403

EDSMITH CLERKOFTHESUPREMECOURT STATEOFMONTANA