Opinion ID: 2832664
Heading Depth: 2
Heading Rank: 1

Heading: Right of First Refusal: Deeds

Text: [¶21] Pew and Cooke assert that the right of first refusal (ROFR) in their deeds is void because it violates the rule against perpetuities. We agree. “Maine follows the traditional common law rule against perpetuities that, ‘no interest is good unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest.’”2 White v. Fleet Bank of Me., 1999 ME 148, ¶ 10, 739 A.2d 373 (citation omitted). In Low v. Spellman, we held that the rule applies to rights of first refusal, at least those that last perpetually.3 629 A.2d 57, 58 (Me. 1993). 2 The common law rule is modified by Maine’s “wait and see” statute, 33 M.R.S. § 101 (2014), which provides: In applying the rule against perpetuities to an interest in real or personal property limited to take effect at or after the termination of one or more life estates in, or lives of, persons in being when the period of said rule commences to run, the validity of the interest shall be determined on the basis of facts existing at the termination of such one or more life estates or lives. In this section an interest which must terminate not later than the death of one or more persons is a “life estate” even though it may terminate at an earlier time. See White v. Fleet Bank of Me., 1999 ME 148, ¶ 11, 739 A.2d 373. The statute is not applicable in this case because the ROFR in the parties’ deeds is not in any way related to “life estates in, or lives of, persons in being,” 33 M.R.S. § 101 (2014); rather, as discussed infra, it runs with the land. See White, 1999 ME 148, ¶ 23, 739 A.2d 373 (“Maine’s ‘wait and see’ statute is in derogation of the common law, and as such, must be narrowly construed.”). 3 Our opinion in Low suggested that rights of first refusal that do not “endure[] forever” and do not mandate a fixed sale price might not violate the rule against perpetuities. See Low v. Spellman, 629 A.2d 57, 58 (Me. 1993). Because we conclude that the ROFR at issue in this case is perpetual, we need not decide whether the rule applies to all such preemptive rights. 11 [¶22] The ROFR in the Pew and Cooke deeds is perpetual. In contrast to Tarason v. Wesson Realty, LLC, where a deed’s use of the term “this Grantee” led us to conclude that a conveyed easement was personal, and not an easement appurtenant, 2012 ME 47, ¶¶ 19-20, 40 A.3d 1005, the ROFR clauses in the Pew and Cooke deeds refer to “the Grantee.” In combination with the deeds’ conveyance to Pew, Cooke, and their “heirs and assigns,” that language suggests that the ROFR was intended to remain applicable in succeeding conveyances. [¶23] Furthermore, in 2013 the Legislature amended the governing statute to make clear its preference for the conveyance of fee simple, as opposed to personal, interests. P.L. 2013, ch. 90, § 1 (effective Oct. 9, 2013) (codified at 33 M.R.S. § 772(1) (2014)). As amended, the statute provides: In a conveyance or reservation of real estate, the terms “heirs,” “successors,” “assigns,” “forever” or other technical words of inheritance, or an habendum clause, are not necessary to convey or reserve an estate in fee. A conveyance or reservation of real estate, whether made before or after the effective date of this section, must be construed to convey or reserve an estate in fee simple, unless a different intention is clearly expressed in the instrument by a statement that the interest conveyed or reserved is an interest other than an estate in fee, by a limiting of the duration of the interest to a period less than perpetual duration or by an explicit restriction of the interest to the use and benefit only of the person or persons to whom it is conveyed or reserved. The omission of technical words of inheritance may not be construed to evidence an intention to convey or reserve an interest other than an estate in fee simple, even if such words are used elsewhere in the same instrument. 12 33 M.R.S. § 772(1) (emphasis added). Nothing in the ROFR at issue limits its duration or explicitly restricts it to the original grantees. Accordingly, the statute requires us to construe the ROFR as running with the land, not as a restriction on alienation personal to the original grantees. [¶24] Having reached this point in the analysis, we apply the rule against perpetuities and conclude that the ROFR does not comply because, as we determined in Low, 629 A.2d at 58-59, it is an interest in land that will not necessarily be exercised (“vest”) within a life in being plus twenty-one years. Because its exercise is unrelated to any person’s lifetime, the ROFR could theoretically languish for decades or longer before being triggered by Pew’s heirs or the Cooke Trust deciding to sell their interests in Mouse Island. For that reason, the ROFR in the Pew and Cooke deeds is void. See id. at 59 (holding that a right of first refusal violated the rule against perpetuities because it “is clear on its face that it is intended to apply not only to the original parties to the contract, but also to all of their heirs and assigns”).