Alaska Supreme Court Opinions made Available byTouch N' Go Systems and Bright Solutions


Touch N' Go
, the DeskTop In-and-Out Board makes your office run smoother.

  This site is possible because of the following site sponsors. Please support them with your business.
www.gottsteinLaw.com

You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Roeland v. Trucano (08/21/2009) sp-6401

Roeland v. Trucano (08/21/2009) sp-6401

     Notice:   This opinion is subject to correction  before
     publication  in  the  Pacific  Reporter.   Readers  are
     requested to bring errors to the attention of the Clerk
     of  the  Appellate  Courts, 303  K  Street,  Anchorage,
     Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
     e-mail corrections@appellate.courts.state.ak.us.
                                                                 

            THE SUPREME COURT OF THE STATE OF ALASKA

BOUDEWIJN ROELAND and )
HENDRIKA FLAMEE, )
) Supreme Court No. S- 12850
Appellants, )
) Superior Court No.
v. ) 1JU-05-441 CI
)
DOUGLAS TRUCANO, )
TRUCANO CONSTRUCTION CO., )
A & J BUILDING, LLC, and )
STEVE LANDVIK, ) O P I N I O N
)
Appellees. ) No. 6401 - August 21, 2009
)
          Appeal  from the Superior Court of the  State
          of  Alaska, First Judicial District,  Juneau,
          Patricia A. Collins, Judge.

          Appearances:  Richard W. Maki  and  David  H.
          Shoup,  Tindall  Bennett & Shoup,  Anchorage,
          for  Appellants.  Anthony M. Sholty, Faulkner
          Banfield,  P.C.,  and  Alexander  Hildebrand,
          Baxter,  Bruce & Sullivan, P.C., Juneau,  for
          Appellees.

          Before:    Fabe,  Chief  Justice,   Matthews,
          Eastaugh, Carpeneti, and Winfree, Justices.

          CARPENETI, Justice.
I.   INTRODUCTION
          I.   Real estate investors sued for two alleged breaches of
the  investors right of first refusal regarding a parcel of  real
property.  The first arose from the proposed transfer of a twenty-
five  percent  interest  in the property  to  a  third  party  in
exchange for a twenty-five percent interest in a business  to  be
operated  by  the third party on the property.  The second  arose
from  the later actual transfer of the entire property to an  LLC
owned   by   the   parties  involved  in  the  initial   proposed
transaction.  After trial, the superior court found  against  the
investors  on  all issues.  Because the investors had  reasonable
notice of the proposed transaction and did nothing to clarify any
confusion about its precise terms, and because the later transfer
was   a  matter  of  structural  convenience  to  effectuate  the
originally   proposed  transaction  and  not  a   separate   sale
triggering  the  right of first refusal, we affirm  the  superior
courts decision in all respects.
II.  FACTS AND PROCEEDINGS
          Appellants   Boudewijn  Roeland  and  Hendrika   Flamee
resided  in  Belgium but owned several investment  properties  in
Juneau.   In  2000 Appellee Steve Landvik approached Roeland  and
Flamee  with  a  proposal  to build a retaining  wall  for  their
property in the heart of Juneaus downtown tourist retail district
on  South Franklin Street.  Roeland and Flamee had purchased  the
property  in  an  undeveloped state in the  1990s,  intending  to
develop  it into a building with shops and apartments or offices.
They agreed to pay Landvik $300,000 for a retaining wall for  the
property to be completed by April 1, 2001.
          Landvik later informed Roeland and Flamee that he  would
be  unable  to  complete the wall on time or  within  budget.   In
August 2001 Landvik and a business associate, Douglas Trucano, met
with Roeland and Flamee several times to attempt to determine  how
to proceed regarding the retaining wall.  During the negotiations,
Landvik  and  Trucano  offered  to purchase  Roeland  and  Flamees
property  and provide Roeland and Flamee a right of first  refusal
in  the  event  Landvik and Trucano decided to sell the  property.
Roeland  and Flamee agreed.  The agreement stated that if  Trucano
and  Landvik  decided  to  sell the property,  they  would  notify
Roeland  and Flamee of their intent to sell.  Roeland  and  Flamee
would  then  have the first right to purchase for ninety  days  on
terms  identical to the terms [Trucano and Landvik]  have  offered
to,  or received from, any third party.  Title to the property was
ultimately  transferred to Trucano Construction Company  for  bank
financing  purposes, and Trucano and Landvik  were  each  personal
guarantors of the right of first refusal.1
          Trucano and Landvik wished to build a retail building on
the  property and posted a sign seeking potential renters for  the
future  building.   In  late 2001 they  were  contacted  by  David
Coates.   Coates owned souvenir shops in Ketchikan and desired  to
open  businesses in Juneau.  He offered an interest in any  future
souvenir  shops  that  he  opened in Juneau  in  exchange  for  an
interest in the property.  The parties negotiated and entered into
a Memorandum of Understanding (MOU).  Trucano and Landvik mailed a
notice  to  Roeland  and  Flamee  informing  them  of  the  offer,
attaching  a  copy  of  the MOU, and giving them  first  right  to
purchase  on  terms identical to the terms that they have  offered
to, or received from, a third person or entity.
          The  MOU memorialized the parties intentions and desires
and was a framework for entering binding agreements in the future.
Trucano  and  Landvik agreed to sell twenty-five  percent  of  the
property  to  Coates,  and Coates agreed to sell  to  Trucano  and
          Landvik a twenty-five percent interest in any stores he would
operate  in the future building.  The MOU further stated that  the
same  arrangement would apply in the event Coates opened any other
businesses  in  Juneau, and that Coates intended  to  acquire  two
stores  and  establish a wholesale business.  The  parties  stated
that  they  would apply for a bank loan to finance  the  building.
They  also stated their understanding as to when and how much rent
Coates would pay to T&L Building, an entity that is not defined in
the agreement.  Additionally, Coates agreed that the conveyance or
transfer  of  any interest in the T&L Building or the property  on
which  the T&L Building is constructed would be subject to a third
partys right of first refusal.  The MOU estimated the value of the
business at seven million dollars.
          Roeland and Flamee responded to the notice of the MOU in
an  April  2002 letter informing Trucanos attorney that they  were
not  in  the  possibility  yet to reply positively  or  negatively
regarding the Right of First Refusal.  Roeland and Flamee went  on
to  state that the MOU was just a business proposal with no  exact
sale  price,  and that they did not have any interest in  becoming
partners   with  Landvik,  Trucano  and/or  their  renter.    They
concluded  at the end of the letter that this is NOT  a  Right  of
First  Refusal and said they wanted a new offer of sale with exact
figures  for  the  twenty-five percent interest in  the  property.
Trucanos attorney responded to this communication by stating  that
there was an exact figure in the MOU; it was $7 million, referring
to the estimated valuation of the business enterprise contained in
the  MOU.  Trucanos attorney also wrote, if you want [Trucano]  to
sell [the interest] to you, then pay the $7 million, and otherwise
generally reasserted that the terms of the sale were contained  in
the MOU.
          Roeland  and  Flamee  had no further communication  with
Trucanos attorney.  Flamee testified that she attempted to  e-mail
Trucano  and  to  call  Landvik.  The trial court  found  credible
Trucanos statement that he did not get the e-mail because  he  did
not  use  that  e-mail address; the trial court was  not  able  to
determine why Landvik did not return Flamees call.  Development of
the  property  proceeded  as planned under  the  MOU  except  that
Landvik  could not or did not contribute his financial  share  and
was not thereafter involved with the project.
          In  July  2004, in the final effectuation  of  the  MOU,
Trucano Construction Company deeded the property to A & J Building
LLC.   That LLC was owned seventy-five percent by Trucano,  twelve
and  one-half percent by David Coates and his wife, and twelve and
one-half  percent by Gary and Meeta Jethani.  Gary  Jethani  is  a
business  partner with Coates in Ketchikan.  Trucano, Coates,  and
the Jethanis also formed Alaska-Juneau Mining LLC at or around the
same  time.  Trucano owns a twenty-five percent interest  in  that
LLC, which owns the retail business contemplated by the MOU.   The
Coateses  and  Jethanis  together own the  remaining  seventy-five
percent  of the second LLC.  During the summer of 2004 the  retail
business  began  operations  in the building  constructed  on  the
property.
          Roeland  and  Flamee sued Trucano Construction  Company,
Landvik,  and Trucano in March 2005 for breach of their  right  of
first  refusal  with  regard to both the 2002  MOU  and  the  2004
effectuating transactions, later adding A & J Building  LLC  as  a
defendant,  as  well.  They also sued for breach  of  the  implied
covenant of good faith and fair dealing and for misrepresentation.
The  case  was  tried  before Superior  Court  Judge  Patricia  A.
Collins,  who  found  against Roeland and Flamee  on  all  claims,
ruling that:  (1) the 2002 MOU was sufficient to give Roeland  and
Flamee fair notice of the terms of Coatess offer; (2) the MOU  was
negotiated  at arms length and in good faith and was not  designed
to cut off Roeland and Flamees right of first refusal; (3) Roeland
and Flamee did not have a contractual right to demand a cash offer
instead  of the MOU; (4) Roeland and Flamee waived their right  of
first  refusal as to an offer to form a business; (5) Roeland  and
Flamee  rejected the cash version of the offer; (6)  the  MOU  was
implemented  without material deviation; (7)  Roeland  and  Flamee
were  equitably estopped from claiming breach because they  stated
that  they  would not agree to a partnership-type arrangement  and
waived  their rights; and (8) the 2004 conveyance to the  LLC  was
not  a  sale giving rise to a new right of first refusal  for  the
remaining  seventy-five  percent of the  property,  but  merely  a
transfer of convenience implementing the business plan set out  in
the 2002 MOU.
          Roeland and Flamee appeal.
III. STANDARD OF REVIEW
           Under  Civil Rule 52(a), factual findings shall not  be
set aside unless they are clearly erroneous.  A finding is clearly
erroneous only if the reviewing court is left with a definite  and
firm  conviction  that a mistake has been made.2   When  reviewing
factual findings, we view the evidence in the light most favorable
to the prevailing party below.3
          We   review  questions  of  law  using  our  independent
judgment and will adopt the rule of law that is most persuasive in
light of precedent, reason and policy.4
IV.  DISCUSSION
     A.   The  Trial Court Did Not Err in Ruling that Trucano  and
          Landvik Did Not Breach Roeland and Flamees Right of First Refusal
          with Respect to the 2002 MOU.
          A.   Roeland and Flamee claim that they were given insufficient
notice  of  the  transaction terms set out in the 2002  MOU.   The
general  rule is that when an owner receives an offer to  purchase
an  interest in a property burdened with a right of first refusal,
the owner  must  provide adequate notice of the terms of the offer
to the holder of the right.5  Adequate notice is notice sufficient
to  enable  the holder of the right of first refusal  (the  right-
holder)  to  decide whether to attempt to match the terms.6   Once
the  seller has made reasonable disclosure of the material  terms,
the  right-holder has a duty to further investigate any terms that
he  or she finds unclear.7  We consider first whether the MOU  was
adequate  to  trigger a duty by Roeland and Flamee to  investigate
further.   Following that, we examine Roeland and Flamees response
to the MOU.
          1.   The trial courts finding that disclosure of terms in the MOU
               was adequate to trigger a duty to investigate further was not
          clearly erroneous.
          Roeland and Flamee argue that the MOU was too vague  and
incomplete  to  provide  reasonable disclosure  of  the  terms  of
Coatess   offer.   Therefore,  they  argue  that  their  duty   to
investigate  the unclear terms did not arise, or that  if  it  did
arise,  that their April response letter sought clarification  and
they did not get it.
          Questions regarding the adequacy of notice are questions
of fact.8  Most courts that have considered the issue have adopted
the rule that adequacy of notice of a proposed sale to a right  of
first refusal holder is sufficient if it provides actual notice of
a  potential  sale and sufficient information for the right-holder
to  determine if he or she is interested in exercising the right.9
The  trial court used this standard.  We agree with Judge  Collins
that this was the correct standard.
          The  transmission of the third-party offer to the right-
holder acts as the sellers offer to the right-holder.10  The offers
terms must be sufficiently definite to evaluate, and all essential
terms  in the third-party offer must be communicated to the right-
holder.11   Generally, this means a written copy of the  offer  or
agreed  terms  should  be provided.12  In this  case,  the  entire
agreement was provided to Roeland and Flamee.  The three-page MOU,
comprising twenty paragraphs, was sufficiently detailed to trigger
Roeland  and Flamees duty to investigate the offers terms  further
if they had questions.
          Roeland  and Flamee provide an extensive list of details
missing  from the MOU, but the absence of these details  does  not
leave  the  essential  terms  of  the  transaction  unclear.   The
essential  terms  were  that Coates would purchase  a  twenty-five
percent  interest  in the property in exchange for  a  twenty-five
percent interest in the retail store that Coates agreed to operate
in  the  building  to  be  constructed on the  property.   Coates,
Trucano, and Landvik would jointly apply for a loan to develop the
building  on the property.  It was not clearly erroneous  for  the
trial  court  to  find  that these core  terms  were  sufficiently
definite  to  enable Roeland and Flamee to determine whether  they
were interested in matching the terms.
          Roeland and Flamee argue that there was no way for  them
to  know  how  certain  terms  would  ultimately  be  defined  and
implemented.  For example, the MOU contained a term providing that
should  the  potential buyer, Coates, open any  additional  retail
stores in Juneau, Trucano and Landvik would also get a twenty-five
percent  interest in those, but the types of items that  would  be
sold  in  the stores are not specified.  Roeland and Flamee  raise
many  other  questions,  including  how  certain  valuations  were
arrived  at  and  the  timing  for applying  for  bank  financing.
However, there is no reason to believe that Roeland and Flamee did
not  have  sufficient  information to  decide  whether  they  were
interested  in  the  same  basic  type  of  transaction.   And  as
discussed in the next section, if they were confused as  to  which
terms were material and which were mere conditions, or wanted  the
details  filled in, it was their obligation to ask  questions  and
seek information that would clarify these details.
          2.   Roeland and Flamee did not investigate the meaning of the
               terms of the MOU, raise any of the questions they now raise, or
               attempt to submit a similar offer.
          1.   Once a landowner reasonably discloses the terms of an
acceptable  third-party offer, the holder of the  right  of  first
refusal has a duty to undertake a reasonable investigation of  any
terms unclear to him. 13  A right-holder may fulfill this duty  to
investigate  by asking about the specific unclear issues,  seeking
additional  information, or advising the seller  that  the  right-
holder considers the notice insufficient, vague, or ambiguous.14
          Roeland    and   Flamee   communicated   their   general
dissatisfaction  with the MOU in their April  letter  to  Trucanos
attorney.  They argue now that communicating their dissatisfaction
was  an  indication  that they considered the  MOU  insufficiently
clear  and that their dissatisfaction should have been interpreted
as  a request for more information.  They also argue that, because
the MOU was unenforceable,  they could not have been in a position
to match it.  We disagree.
          The  superior  court found, based on the  letters  text,
that  it is difficult to interpret this letter as anything  but  a
rejection  of  any  transfer  that  would  entail  a  partner-type
arrangement.   The court also found that Roeland and Flamee  could
have  but did not clearly inquire as to whether or how they  could
meet  Coates  offer.   Finally, the trial  court  found  that  the
parties to the MOU intended to be bound by it and that the failure
to  specify details such as the number of stores or merchandise to
be  sold  reflected a mutual understanding that the parties  would
take  certain calculated risks in exchange for certain  calculated
advantages.  These findings are not clearly erroneous.
          Here,  as  they  admit, Roeland and  Flamee  could  have
attempted to submit a competing equivalent offer, but did  not  do
so.  Where a commercial seller has received a unique offer that  a
right-holder  could not exactly duplicate, we  agree  with  courts
characterizing the submission of the offer to the right-holder  as
an  invitation  to  the  right-holder  to  submit  a  commercially
equivalent offer.15  The right-holder may propose comparable terms
to the original offer which are possible for him to meet and which
would meet the sellers commercial interests.16  The seller then has
a  duty  to use commercially reasonable standards to evaluate  the
two  offers.  For these reasons, the right of first refusal is not
illusory.
            [T]he  owner of property subject to a right  of  first
refusal  remains  master of the conditions  under  which  he  will
relinquish   his  interest,  as  long  as  those  conditions   are
commercially   reasonable,  imposed  in  good   faith,   and   not
specifically   designed   to  defeat  the   preemptive   rights.17
Therefore,  where   as here  the right of first refusal  does  not
specify that the third-party offer must be in cash, we give effect
to  the  owners right to sell his property for whatever he wishes.
There  was  no obligation to provide a cash offer.18  Roeland  and
Flamee   undertook  no  inquiries  or  attempts  to  negotiate   a
commercially  equivalent  offer.   Accordingly,  they  failed   to
exercise their right of first refusal.
     B.   The Trial Court Did Not Err in Ruling that Roeland and Flamee
          Are Estopped from Claiming Breach of the Right of First Refusal.
     A.         The  trial  court  found that Roeland  and  Flamee
represented  to  Trucano  that they were waiving  their  right  to
attempt  to  meet  Coatess  offer,  and  Trucano  relied  on  this
representation  in  carrying  out  the  terms  of  the  MOU.    We
considered the question of estoppel in the context of the right of
first  refusal in Foster v. Hanni,19 where we held that  equitable
estoppel  applies  where (1) a right-holder has knowledge  of  the
terms  of  a  third-party  offer, (2) the right-holder  apparently
waives  that right, and (3) the seller reasonably relies  on  this
waiver.20   In  that case, a seller communicated an offer  to  the
right-holder, and the right-holder declined it.  The seller  later
offered to finance the purchase if the third-party purchaser could
not  get bank financing, but did not communicate that offer to the
right-holder.  The superior court granted summary judgment to  the
right-holder.  Although we agreed with the superior court that the
offer  to finance the purchase was a second offer that the  seller
should  have communicated to the right-holder, we reversed because
there  were disputed facts about whether the right-holder actually
knew about the second offer, and might have waived his right.   In
reversing, we held that an implied waiver occurs where the  course
of  conduct pursued evidences an intention to waive a right, or is
inconsistent  with  any other intention than a  waiver,  or  where
neglect  to  insist on the right results in prejudice  to  another
party.21
          As  noted above, the trial court found that Roeland  and
Flamee waived their right of first refusal.  The court based  this
finding in part on their statements in the text of the April  2002
letter  refusing  to enter a partnership-type arrangement  and  in
part  on  their  failure to investigate that  approach  and  their
demand  of a cash offer to which they had no right.  Their  letter
denying  that the MOU could satisfy their right of first  refusal,
and  stating that the MOU has nothing to do with a Right of  First
Refusal,  demonstrated Roeland and Flamees incorrect understanding
of  their right of first refusal.  And they waived that right when
they  stated that they do not have any intention to become traders
and  do not have any interest in being partners with Trucano.  The
superior  courts conclusion that Roeland and Flamee  waived  their
right to enter a business arrangement with Trucano was not error.
          Roeland  and  Flamees  testimony  indicated  that   they
understood the basic terms of the proposed transaction as set  out
in  the  MOU, did not want it, and mistakenly believed that  their
contract gave them the right to insist on a cash price offer.  And
it  is undisputed that (1) Roeland and Flamee waited to bring suit
until  after  Trucano and Coates consummated  their  agreement  in
full,  completed  the  building on the property,  and  opened  the
retail   business  in  the  building,  and  (2)  this  delay   was
prejudicial.  The trial court did not err with respect  to  either
its  legal  interpretation of the letter or its  factual  findings
that Roeland and Flamee had knowledge of the terms of the offer to
Coates,  that they waived their right of first refusal,  and  that
Trucano reasonably relied upon that waiver.
     C.   The  Trial Court Did Not Err in Finding that Trucano and
          Landvik Acted Fairly and in Good Faith.
          A.   Bad faith in right of first refusal transactions is not found
where a party undertakes an act permitted by the contract, even if
the  motivations are unpleasant.22  Rather, it is typically  found
where  the seller does not have a legitimate interest in the terms
of the third-party offer, deliberately omits terms in relaying the
offer  to  the right-holder, or does not deal at arms length  with
the third-party offeror.23  Roeland and Flamees primary argument is
that  the  trial  court should have seen the seven million  dollar
value  estimate as pure fabrication, designed to frustrate Roeland
and  Flamees first refusal rights.  But they do not point  to  any
evidence  showing  that  the  trial  courts  finding  was  clearly
erroneous,  and  the  trial court credited Trucanos  and  Landviks
testimony  that  they followed a particular method of  calculating
that value and believed it to be an educated estimate.  We see  no
basis  upon which to hold that the trial courts finding is clearly
erroneous.
     D.   The Trial Court Did Not Err in Ruling that the 2004 Transfer
          to the LLC Was Not a Sale Subject to Roeland and Flamees Right of
          First Refusal.
          Roeland  and Flamee argue that the actual 2004  transfer
of  the property from Trucano Construction Company to the  A  &  J
Building  LLC  constituted  a  new sale  that  should  have  again
triggered  their  right of first refusal to the remainder  of  the
property.  The trial court ruled that the transfer was a matter of
convenience  and  a  mere matter of form, and did  not  alter  the
balance  of  control over the property.  We agree with  the  trial
courts analysis of this issue.
          In the actual transfer of the property, ownership of the
property changed from the originally proposed seventy-five percent
Trucano Construction Company and twenty-five percent Coates to one
hundred  percent  in  A  & J Building LLC.  But  Trucano  controls
seventy-five  percent  of  the LLC, and Coates  and  the  Jethanis
control the remainder.  The superior court ruled that Roeland  and
Flamee  retain the right of first refusal with respect to seventy-
five  percent of the property if a sale occurs.  Trucano  concedes
that  any  sale  of the property by the LLC would  be  subject  to
Roeland  and  Flamees  first  refusal rights  as  to  seventy-five
percent of the property.  We interpret the superior courts  ruling
and  Trucanos concession to be that Roeland and Flamees  right  of
first refusal is for a seventy-five percent undivided interest  in
any  portion of the property intended for sale by the  LLC.   Thus
Roeland   and   Flamees  situation  is  the  same  as   originally
contemplated  in  the MOU, and the 2004 transfer did  not  trigger
their right of first refusal.
          In Prince v. Elm Investment Co.,24 the Utah Supreme Court
summarized  the case law and developed a four-part test  that  the
superior court applied here.  A sale occurs under the Prince  test
when  there  is  a  transfer (a) for value (b)  of  a  significant
interest  in  the  subject  property (c)  to  a  stranger  to  the
[agreement]  (d)  who thereby gains substantial control  over  the
[subject]  property.25  Typically a transfer between corporations,
          partnerships, or individuals to another form of organization
involving  the  same  parties does not  result  in  a  significant
transfer  of ownership or control to an unrelated third party  and
therefore is not a sale.26  Where individuals transferred property
to  their own wholly-owned corporation, the Colorado Supreme Court
observed  that  in essence, the owners had sold  the  property  to
themselves.27  There was no arms length transaction typical of open
market  sales  between  strangers.28  The  Wyoming  Supreme  Court
requires an actual change in control.29
          In  applying the Prince test, we look first to the third
and fourth factors, because they are dispositive:  The transfer of
the  property to the LLC did not involve a sale to a stranger  who
thereby  gained substantial control over the property.  After  the
transfer to the LLC, Trucano continued to have substantial control
over  the property, just as he had before the sale.  Under the LLC
agreement  an LLC decision requires seventy-five percent  majority
vote  and  Trucano  held seventy-five percent of  the  LLC  voting
interests.  Thus, although there was a transfer for value  (factor
1)  of a significant interest in the subject property (factor  2),
and  although  there  was a new owner (factor  3),  there  was  no
transfer  of  substantial control to a stranger  to  the  property
because Trucano owned seventy-five percent of the LLC, and  Coates
and  the Jethanis, through their prior contractual interest in the
property, owned the balance of the LLC.30  Although we do not find
this transaction to have been a sale for purposes of the right  of
first  refusal,  Roeland and Flamees first-refusal  rights  remain
intact  as  to  a seventy-five percent undivided interest  in  the
property  because when the LLC obtained the property it was  still
burdened by the right.
          Roeland  and  Flamee raise two final  points  that  they
argue  should lead this court to hold that the trial courts ruling
was  legally incorrect.31  Neither was raised below and both  were
therefore waived.32

V.   CONCLUSION
          Because  Roeland and Flamee were provided with  adequate
notice  of  a  proposed  sale to a third party  of  a  twenty-five
percent interest in the disputed property, and because Roeland and
Flamee waived their legal right to attempt to match the terms  and
did
not  investigate  any unclear terms, we AFFIRM  the  trial  courts
ruling  that there was no breach of the right of first refusal  or
the  implied covenant of good faith with respect to the 2002  MOU.
Because  Trucano Construction Company deeded the disputed property
to  the  LLC  Trucano  controlled to  effectuate  the  transaction
proposed  in the MOU, and Roeland and Flamees rights with  respect
to  the  remaining undivided seventy-five percent interest in  the
property are essentially the same, we also AFFIRM the trial courts
ruling  that  the 2004 transaction was not a sale  that  triggered
Roeland and Flamees right of first refusal.
_______________________________
     1     The  recorded  notice of the right of  first  refusal,
signed by an agent for Roeland and Flamee, expressed an exception
to  the  right  of  first refusal for any sale of  stock  in  the
company  or  the  property  and any  transfers  between  Landvik,
Trucano, their families, and the company.

     2     Municipality of Anchorage v. Gregg, 101 P.3d 181,  186
(Alaska  2004)  (quoting Am. Computer Inst., Inc. v.  State,  995
P.2d 647, 651 (Alaska 2000)).

     3     Fuller  v.  City of Homer, 113 P.3d 659,  662  (Alaska
2005).

     4    Guin v. Ha, 591 P.2d 1281, 1284 n.6 (Alaska 1979).

     5     See  Dyrdal v. Golden Nuggets, Inc., 672 N.W. 2d  578,
584 (Minn. App. 2003).

     6    Id. at 585.

     7     Id.  (quoting Koch Indus., Inc. v. Sun Co., 918 F.  2d
1203, 1212  (5th Cir. 1990)).

     8      See Jensen v. Alaska Valuation Serv., Inc., 688  P.2d
161, 164 (Alaska 1984) (adequacy of disclosure of agency status a
question  of  fact);   Armco Steel Corp. v.  Isaacson  Structural
Steel  Co.,  611  P.2d 507, 514 (Alaska 1980) (reasonableness  of
notice generally a question of fact).

     9     Dyrdal, 672 N.W.2d at 584-85 (citing John D.  Stump  &
Assocs., Inc. v. Cunningham Meml Park, Inc., 419 S.E.2d 699,  706
(W. Va. 1992) and Koch Indus., 918 F.2d at 1212-13)).

     10    See Gyurkey v. Babler, 651 P.2d 928, 931 (Idaho 1982);
Lehns Court Mgmt. v. My Mouna Inc., 837 A.2d 504, 507 (Pa. Super.
2003).

     11     See Gyurkey, 651 P.2d at 931-32 (all terms and entire
offer   must   be  communicated  but  copy  of  offer  ordinarily
sufficient  so long as it contains full agreement between  seller
and  third  party);  Dyrdal, 672 N.W.2d at  584  (acceptable  for
certain  information to be missing if sufficient information  for
right-holder  to  determine  if he is  interested  in  exercising
right).

     12    Gyurkey, 651 P.2d at 932.

     13      Dyrdal,  672   N.W.2d  at 585  (quoting  Comeaux  v.
Suderman, 93 S.W.3d 215, 221 (Tex. App. 2002)).

     14     See id. at 586; Koch Indus. Inc. v. Sun Co., 918 F.2d
1203, 1213 (5th Cir. 1990).

     15       See Prince v. Elm Inv. Co., 649 P.2d 820, 826 (Utah
1982).

     16     See  West Texas Transmission, LP v. Enron Corp.,  907
F.2d 1554, 1566 (5th Cir. 1990) (where third-party offer contains
terms  peculiar to relationship between third party and  property
owner that the right-holder could not possibly meet, an exception
to  strict conformity requirement for acceptance to offer exists,
and   right-holder  may  make  variations  not   constituting   a
substantial  departure from the original offer)  (citing  Prince,
649 P.2d at 825; Matson v. Emory, 676 P.2d 1029, 1032 (Wash. App.
1984);  Brownies Creek Collieries, Inc. v. Asher Coal  Min.  Co.,
417 S.W.2d 249, 252 (Ky. 1967)).

     17    Id. at 1563.

     18     See  id. at 1564 (citations omitted).  We  note  that
Roeland  and Flamee also claimed in their April 2002 letter  that
they  could not exercise their right of first refusal until  they
were given exact figures.  The trial court reasonably interpreted
that  statement in light of the remainder of the letter  to  mean
that  they were insisting on a cash offer.  But they did not have
the  right to insist on a cash offer because their right of first
refusal  did  not  limit the forms that property transfers  could
take.

     19    841 P.2d 164 (Alaska 1992).

     20    See id. at 171.

     21     Id.  (quoting Milne v. Anderson, 576 P.2d 109 (Alaska
1978)).

     22    Stevens v. Foren, 959 P.2d 1008, 1011 (Or. App. 1998).

     23    See id.; see also Prince v. Elm Inv. Co., 649 P.2d 820,
824  (Utah, 1982) (decision as to time or terms under which owner
will  sell  are  his exclusive prerogative and no  bad  faith  if
commercially  reasonable); Matson v. Emory, 676 P.2d  1029,  1032
(Wash. App. 1984).

     24    649 P.2d at 823.

     25    Id.; see also Belliveau v. OCoin, 557 A.2d 75, 79 (R.I.
1989).

     26     Creque v. Texaco Antilles Ltd., 409 F.3d 150, 153 (3d
Cir. 2005).

     27     See  Kroehnke v. Zimmerman, 467 P.2d 265, 267  (Colo.
1970).

     28    Id.

     29    McGuire v. Lowery, 2 P.3d 527, 532 (Wyo. 2000).

     30    Indeed it seems likely that the 2004 transfer might fit
within the express exception in the right of first refusal for  a
sale  of  stock  in  the  company or  the  property.   The  final
structure of the transaction not only was a matter of convenience
to  effectuate  the  transaction  contemplated  in  the  MOU,  it
replicated  a sale of stock  at the conclusion of the transaction
the  property  was  owned by an entity itself  held  by  multiple
owners,  just as if Trucano had sold twenty-five percent  of  his
interest in Trucano Construction Company in return for a  twenty-
five percent interest in Alaska-Juneau LLC.

     31     They  argue (1) that the fiduciary duty that  Trucano
owes  to  the other members of the LLC limits his decision-making
more  than  it  was limited under the MOU, and (2)  that  Trucano
could  transfer significant control of the property  without  the
LLC selling the property.

     32     See  Brooks  v. Brooks, 733 P.2d 1044,  1053  (Alaska
1987).

This site is possible because of the following site sponsors. Please support them with your business.
www.gottsteinLaw.com
Case Law
Statutes, Regs & Rules
Constitutions
Miscellaneous


IT Advice, Support, Data Recovery & Computer Forensics.
(907) 338-8188

Please help us support these and other worthy organizations:
Law Project for Psychiatraic Rights
Soteria-alaska
Choices
AWAIC