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E.R. Linde Construction Corp. v. Goodwin

Superior Court of Pennsylvania

June 7, 2013


Appeal from the Order Entered May 8, 2012 In the Court of Common Pleas of Wayne County Civil Division at No(s): 462 Civil 2011




Appellant, E.R. Linde Construction Corporation ("Linde"), appeals from the order entered May 8, 2012, by the Court of Common Pleas of Wayne County, which granted Appellee, William R. Goodwin's motion for summary judgment. At stake in this case is whether Linde properly exercised its right of first refusal on an offer for real estate owned by Goodwin. The offer presented to Linde included a purchase not only of the real estate, but also of various other assets, including intellectual property, business vehicles, and mining equipment. Linde purported to exercise its right only as to the real estate and refused to pay the purchase price allocated to the other assets. The trial court concluded that Linde failed to properly exercise its right by failing to accept the terms of the offer in its entirety. After careful review, we conclude that the language of the right of first refusal and longstanding precedent in the Pennsylvania Courts contradicts the trial court's conclusion, and we therefore reverse.

The factual background of this case is largely uncontested. In 2003, Linde entered into an agreement with Goodwin, John Malti, and Ronald Malti ("Lessors") to lease from the Lessors a property commonly known as Middlecreek Quarry. Paragraph 16.1 of the lease agreement contains the following provision for a right of first refusal:

Lessors hereby grant to Lessees a Right of First Refusal to purchase any portion, up to the whole thereof, of the Premises, i.e. the 87.3 acres. … [I]f [Linde] choose[s] to exercise the Right of First Refusal, they will have the right to purchase said property under the same terms as the Agreement of Sale provided to them.

Lease Agreement, 3/11/2003, at 8. The first page of the lease agreement defines the "Property" as the parcel described in an attached deed, and the "Premises" as the portion of the property approved for mining in addition to another parcel containing an asphalt plant. See id., at 1. In 2007, John Malti and Ronald Malti conveyed their interest Middlecreek Quarry to Goodwin, leaving Goodwin as the sole owner of the property.

Thereafter, in early 2009, Goodwin notified Linde of an offer for the property from George Cabel. Under the terms of the offer, Cabel offered to pay $400, 000.00 for the real estate, and $17, 512, 469.00 for "equipment, furniture, inventor, debt assumption, and liabilities." Sales Agreement, 1/26/2009, at Schedule "D". By letter dated March 23, 2009, counsel for Linde indicated that Linde was exercising its right of first refusal for the real estate:

First, if you carefully read the Lease Agreement the right of first refusal is limited to the land only. [Cabel's offer] prices that land at $400, 000.00. In accordance with the Lease, we are not obligated to purchase any other equipment from either Mr. Goodwin or any of his companies. You are right however that if any part of the real estate is to be sold, my client has a right of first refusal as set forth in the Lease.

Letter from Lee C. Krause, Esq., dated 3/23/2009, at 1. Attorney Krause also enclosed with this letter the 5% down payment required by the lease agreement. Goodwin treated Linde's actions as insufficient to consummate the right of first refusal, noting that it was not an acceptance of the same terms offered by Cabel. Goodwin also returned the 5% down payment.

Linde subsequently filed a complaint asserting claims for declaratory judgment and specific performance under the lease agreement. Discovery ensued, and on February 28, 2012, Goodwin filed a motion for summary judgment. Following argument and the submission of briefs, on May 8, 2012, the trial court granted Goodwin's motion and dismissed Linde's complaint with prejudice. Linde filed the instant, timely appeal on June 8, 2012.[1]

On appeal, Linde raises two issues for our review:

A. Whether a right of first refusal as to the conveyance of a property can be defeated by including that property in a multi-property or multi-asset transaction?
B. Whether this Honorable Court committed an error of law by dismissing the Complaint with prejudice even ...

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