Court Opinion

ID: 9544919
Source: CourtListenerOpinion
Date Created: 2023-08-07 17:03:28.073521+00
Date Added: 2024-06-11T15:13:46.895561
License: Public Domain

BISTLINE, Justice,
concurring in part.
It is true that at the time during which the facts of this controversy developed there was no precise statutory or case law available in Idaho which informed parties dealing in options (or rights) of first refusal what would be required for providing adequate notice of a proposed third-party sale. It is equally true that such was the situation when Judge Kramer heard and decided the resultant controversy. It would, therefore, be difficult to disagree with Justice Shepard’s dissenting view in support of Judge Kramer’s determination that the giving of notice to Gyurkey was adequate. Henceforth, with the forewarning of the various opinions which issue today, parties dealing with options of first refusal will clearly understand that, unless the option agreement itself spells out a different provision, it may be incumbent upon the option grantor to fully disclose, in writing, the exact terms of a proposed sale to a third party.
The larger problem in this case, however, is the substance of the notice given, and whether it conforms to the option agreement. Gyurkey’s option was the right of first refusal on lot 13, which adjoined lot 14 which Gyurkey had earlier purchased outright. At the time Babler reached an agreement to sell lot 13 to a third party, he was obligated to so inform Gyurkey, and Gyurkey clearly had the right to buy on the same terms and conditions. Indeed, that is what options of first refusal are all about. In this instance, however, Babler did not actually have an offer on lot 13 which he intended to accept, but nevertheless notified Gyurkey that there was a pending offer for $50,000.
Babler’s brief presents the contention that “[o]n the basis of Babler’s familiarity with the lot in question and the appreciating market value of real estate in Ketchum, Idaho, Babler determined the fair market value of lot 13 to be Fifty Thousand Dollars” — from which it is said to follow that such a determination made in good faith, as the trial court so determined, is the end of the inquiry. At the same time in a symphony of self-contradiction, Babler cites Aden v. Estate of Hathaway, 162 Colo. 311, 427 P.2d 333 (S.Ct. en banc 1967)1 for the proposition that that “Court concluded that it was not proper for it to make the determination for the bwner as to what the smaller tract was worth.” Yet Babler contends it was permissible for him to do so — a proposition in no way encompassed by the option agreement.
*670I am of the view that the judgment below must be reversed because Babler had no right to separately set a price for lot 13, but was required to pass on to Gyurkey any bona fide offer on lot 13 which a third party offered. Hence, I accept for this case that, as may be the custom in Ketchum, such a bizarre method of communicating a pending offer as employed here suffices. For future cases I agree with Justice Bakes that “[t]he preemptor, under a right of first refusal requiring acceptance on the same terms and conditions, is entitled to no lesser means of receiving the offer than is provided to the seller by the third party offeror.” I am concerned, however, that this statement is not sufficiently all-encompassing for application to the varying manners of third-party offers. Certainly, the pre-emptor is entitled to “no lesser means.” But there will be occasions when the preemptor is entitled to more. A written offer should be passed on intact once it has been received and the optionor has made the decision to accept it. If the written offer is not the complete understanding between the optionor and the third party, then any further details should be added to the written notice informing the optionee of the third-party offer received by the optionor and his intent to accept it. This rule should also prevail in any situation where the third-party offer is not in writing. It should be incumbent upon the optionor, absent any contrary written agreement covering content and service of the notice, to make a full and complete disclosure of his pending transaction with the offering third party. A rule requiring such will be more in accord with requirements of fair dealing. Although the parties to the option agreement ordinarily are not in a fiduciary position as to each other, that which was written by Judge Lumbard in Funk v. Tifft, 515 F.2d 23, 25 n. 2 (9th Cir. 1975), seems applicable:
“[Where a broker] failed to make adequate disclosures to the [buyer,] such disclosures should be required. This sort of disclosure requirement finds its analogy in many areas of our law today, especially in statutory enactments designed to protect the unknowing individual from the professional. See, e.g., Truth-in-Lending Act, 15 U.S.C. §§ 1601-65; Securities Act of 1933, 15 U.S.C. §§ 77a-77aa; Interstate Land Sales Full Disclosure Act, 15 U.S.C. §§ 1701-20.”
Notwithstanding the fact that Babler had no separate transaction pending for the sale of lot 13, but rather was engaged in selling it along with other property which he owned, (which would thereby deny Gyurkey an opportunity to realize upon his option) Gyurkey would have us fashion a rule that Babler must now sell the property to Gyurkey on a “proportionate” price basis. I do not agree. The rationale seems to be that because Babler violated one agreement by unilaterally setting the fair market value on lot 13, he must suffer having foisted off onto him a purchase price of the Court’s own manufacture — a proposition which runs counter to numerous decisions of most courts, including this one. Two wrongs do not make a right, however.
The sale to the third parties is in derogation of Gyurkey’s rights, and must be set aside. At such time as Babler hereafter receives a bona fide offer for the purchase of lot 13, he must in writing so notify Gyurkey who will then have five business days in which to signify in writing notice of his intent to purchase on and acceptance of those same terms and conditions. Aden, supra; Guaclides, supra. Based on further evidence, and new findings and conclusions to be entered, Gyurkey may be entitled to judgment for any damages suffered by Babler’s actions, including attorney’s fees, both in the trial court and in this Court where he has pursued his right to a correct decision in the trial court. The trial court’s Findings of Fact 15 and 16, and Conclusions of Law 3 and 6 should remain, but Conclusion 4 should be set aside. I concur in the opinion of Justice Bakes insofar as it reverses the dismissal. Although I do not see the necessity thereof, I concur in the holding that an injunction may issue. I join, too, in awarding costs to appellant Gyurkey.

. Aden is a unanimous decision from a respectable court and supports my view coinciding with Babler’s that the courts are without authority to determine the price at which he must sell. The underlying factual situation is practically identical; although Aden involved an offer to buy the larger tract and the owner did not relate to his optionee a proposition that there was an offer on the included component at a price fixed by the owner. The optionee sought to compel a sale (at a proportionate price) of the included component upon which he held the option of first refusal — his theory being that the owner had agreed to let go of the property. The Aden court followed the reasoning of Guaclides v. Kruse, 67 N.J.Super. 348, 170 A.2d 488 (App.Div.1961) to which latter case reference is made for an exhaustive and well-reasoned discussion of the principles involved here — and one which should satisfy the most inquisitive minds as to their validity.