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Crestview Builders, Inc. v. Noggle Family Limited Partnership

October 4, 2004

CRESTVIEW BUILDERS, INC., PLAINTIFF-APPELLEE,
v.
THE NOGGLE FAMILY LIMITED PARTNERSHIP, ROBERT NOGGLE, AND FERN NOGGLE, DEFENDANTS-APPELLANTS.



Appeal from the Circuit Court of Du Page County. No. 01-MR-260. Honorable Edward R. Duncan, Jr., Judge, Presiding.

The opinion of the court was delivered by: Justice Byrne

PUBLISHED

Plaintiff, Crestview Builders, Inc., entered into a real estate sale contract with The Noggle Family Limited Partnership (NFLP). Under the contract, NFLP was to provide plaintiff with a right of first refusal on the sale of a portion of the land. The parties were ultimately unable to agree on the terms of the right of first refusal, and plaintiff filed a complaint for declaratory judgment and specific performance against defendants, NFLP and Robert Noggle and Fern Noggle, two partners of NFLP. Plaintiff moved for summary judgment and defendants moved for judgment on the pleadings. The court denied defendants' motion and granted summary judgment to plaintiff. Defendants appeal, arguing that the right-of-first-refusal provision is unenforceable. We agree, and thus we reverse.

On March 19, 1997, plaintiff entered into a contract with NFLP, whereby NFLP agreed to sell plaintiff 220 acres of land. NFLP retained possession of a homestead property located on the land. Under the contract, three closings were to take place, with a portion of the land being sold at each closing. Paragraph "R-5" of the rider to the contract provided:

"At the first closing ***, [NFLP] agrees to execute and deliver to [plaintiff] a recordable right of first refusal on [NFLP's] retained homestead."

On December 10, 1997, NFLP, without first informing plaintiff, transferred the homestead property to Robert Noggle and Fern Noggle. The parties did not discuss the right of first refusal at either the first or the second closing, and NFLP did not execute and deliver a right of first refusal to plaintiff. At the third closing, on December 15, 2000, the parties inserted the following language at the bottom of the closing statement:

"[NFLP] agrees to comply with the requirements of paragraph R-5 of the rider to the Real Estate Sales Contract by delivering a signed and recordable right of first refusal to [plaintiff] by 12/30/00 for the homestead."

Following the third closing, during December 2000 and January 2001, the parties negotiated the terms of the right of first refusal. Plaintiff suggested that the term of the right of first refusal should be 10 years, but NFLP sought a term of 3 years. The parties apparently were unable to agree on a final draft. In April 2001, plaintiff filed a complaint for declaratory judgment and specific performance against defendants. Plaintiff ultimately filed a second amended complaint seeking the court to declare that the right-of-first-refusal agreement was valid and binding and that its duration was unlimited. Plaintiff later moved for summary judgment and defendants moved for judgment on the pleadings. The trial court granted plaintiff's motion and denied defendants' motion. The court found that the agreement set forth in the closing statement was valid and binding and that plaintiff had a right of first refusal on the retained homestead for the lives of the parties. The court denied defendants' motion to reconsider, and defendants appealed.

On appeal, defendants assert that the court erred in granting plaintiff's motion for summary judgment and denying its motion for judgment on the pleadings, arguing that the right of first refusal was not valid because it was missing essential terms. A motion for summary judgment is properly granted only when the pleadings, depositions, admissions, and affidavits on file reveal that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Travelers Insurance Co. v. Eljer Manufacturing, Inc., 197 Ill. 2d 278, 292 (2001). In considering a summary judgment motion, the court has a duty to construe the evidence strictly against the movant and liberally in favor of the nonmoving party. Travelers Insurance, 197 Ill. 2d at 292. A motion for judgment on the pleadings requires the trial court to examine the pleadings and determine whether there is an issue of fact or whether the controversy can be resolved as a matter of law. Pekin Insurance Co. v. Allstate Insurance Co., 329 Ill. App. 3d 46, 49 (2002). On appeal, the reviewing court must ascertain whether the trial court correctly determined that the pleadings presented no issue of material fact and, if there was no such issue, whether the court correctly entered the judgment. Pekin Insurance Co., 329 Ill. App. 3d at 49. We review de novo both the grant of summary judgment and the denial of the motion for judgment on the pleadings. Travelers Insurance, 197 Ill. 2d at 292; Pekin Insurance Co., 329 Ill. App. 3d at 49.

In order for a contract to be enforceable, its terms and provisions must enable the court to ascertain what the parties have agreed to do. Pritchett v. Asbestos Claims Management Corp., 332 Ill. App. 3d 890, 896 (2002). Price is an essential element of every contract for the transfer of property and must be sufficiently definite or capable of being ascertained from the parties' contract. Universal Scrap Metals, Inc. v. J. Sandman & Sons, Inc., 337 Ill. App. 3d 501, 505 (2003). However, a right of first refusal need not specify the price, as long as it provides a method whereby the price may be ascertained. Universal Scrap Metals, 337 Ill. App. 3d at 505; Kellner v. Bartman, 250 Ill. App. 3d 1030, 1035 (1993).

Defendants argue that the right of first refusal in the parties' contract did not specify a method whereby the price of the homestead could be ascertained because it contained no terms other than the phrase "right of first refusal." Plaintiff responds that the use of the term "right of first refusal" is sufficient in itself to provide a method whereby the price and other terms may be ascertained. We agree with defendants.

In Folsom v. Harr, 218 Ill. 369 (1905), the parties entered into a lease agreement that included the following provision: " 'Should [the defendant] conclude to sell this property, then [the plaintiff] is to have the first chance to buy the same.' " Folsom, 218 Ill. at 370.

The defendant sold the property without first offering it to the plaintiff and the plaintiff brought suit. The court held that the contract was unenforceable because it was uncertain and incomplete, reasoning that the contract provided no method for determining the price of the property. Folsom, 218 Ill. at 372-73. The court noted that the agreement would have been enforceable if it had stated that the plaintiff had the right to purchase the property under the terms offered by a third party. Folsom, 218 Ill. at 373.

In Universal Scrap Metals, a case upon which defendants rely, the parties entered into a scrap metal sales agreement that contained a ...


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