Opinion ID: 2832664
Heading Depth: 2
Heading Rank: 2

Heading: Relevant Agreements

Text: [¶5] Several agreements entered into by the parties or their predecessors in title are relevant to our analysis.
[¶6] A letter setting out the basic terms of the purchase of Mouse Island, signed by these parties or their predecessors, contained the following provisions: [Nickles, Pew, and Sayler] understand[] that the caretaker is receiving $700 a month plus payment for utilities. [They] agree[] that the caretaker should continue in his position and receive the same monthly payments. All the parties are agreed that any proposal for future development on the Island would require the written, unanimous concurrence of all owners of the Island. Further, it is agreed that, if any owners wish to dispose of any or all of his or her interest, that interest will first be offered to the Other Owners to provide them with the opportunity first to purchase the interest. It is agreed that an association of owners will be created to collect assessments from the owners for payment of the caretaker’s salary, real estate taxes, and general maintenance. These assessments will be divided equally among the three principal houses . . . . Each of the parties understands that in situations where the caretaker must call in outside assistance to work on a project affecting only a particular house, the owner of that house will pay for the outside assistance. Work done by the caretaker on common Island property, such as the sea wall, studio, tennis courts, etc., will be shared by all owners. Further, it is understood that the caretaker’s work on each of the homes on the Island will not change the basi[c] intention of the parties to share equally the caretaker’s salary and benefits. 4
[¶7] A formal purchase and sale agreement executed by the parties or their predecessors contained two relevant provisions: (1) a requirement that a right of first refusal be included in the deeds, and (2) an agreement that the owners of Mouse Island would create an association within 120 days “for the purpose of maintaining all the facilities, buildings and improvements on or related to Mouse Island excepting [the three separately-owned houses] . . . and generally governing the management of the Island.”
[¶8] As provided in the purchase and sale agreement, the deeds leading to the current ownership situation on Mouse Island each contained the following clause: In the event that the grantee desires to sell the real estate herein conveyed, the grantee shall prior to the acceptance of any offer received by him/her make a similar offer excepting only as to the time set for acceptance to his/her dwelling co-tenant of record and to his/her co-tenants in Mouse Island. His/her dwelling co-tenant shall have 30 days in which to accept the grantee’s offer. If his/her dwelling co-tenant accepts the offer, all other offers made by the grantee shall automatically be terminated. If his/her dwelling co-tenant does not accept the offer within said 30-day period, the Island co-tenants shall have 15 days in which to accept the grantee’s offer. In the event that two or more Island co-tenants attempt to accept the offer after the dwelling co-tenant’s time for acceptance has terminated, the first acceptance from an Island co-tenant received by the grantee shall be binding and other attempted acceptances after said 5 receipt shall be void. Closing shall be within 90 days of the acceptance of the grantee’s offer . . . . [¶9] The deed from John P. Cooke to his successors, the Cooke Trustees, inadvertently omitted the clause; in entering a partial summary judgment in this case the Superior Court, without objection, reformed the Cooke Trustees’ deed to include the clause.
[¶10] Subsequent to the execution of the deeds, Pew, Nickles, Sayler, and the predecessors of Hincks and Cooke signed an “Agreement of Principles for Mouse Island” (AOP). The court found that [t]he original owners, including the Pews, the Saylers and the Nickleses, entered into [the AOP]. . . . They executed the document proximate in time to when they bought the island. Although Cooke and the Hinckses acquired their ownership interest after the original owners signed the AOP, they considered themselves to be bound by it. The court therefore treats all of the present owners as parties to the agreement. Although the Cooke Trustees challenge the court’s construction of the AOP, they do not contest its finding that they are bound by it. [¶11] The AOP created six voting shares, two for each of the three houses. As a result, Pew has two voting shares and Cooke and the Other Owners each have one. The AOP states, in relevant part: The undersigned, who are the owners of Mouse Island, express their intention that the Island be maintained essentially as it is today and 6 that the working island atmosphere be maintained and enhanced. . . . The parties also take this occasion to reaffirm the covenants in their deeds respecting the right of first refusal accorded individual property co-tenants or Island co-tenants. .... The parties agree that any significant changes affecting the Island require a two-thirds vote of the parties, i.e., four shares. Similarly, any change in the principles established by this Agreement shall be by two-thirds vote of the parties.