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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.
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 a 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 court's 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 Juneau's 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 Flamee's 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.
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 party's 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 Trucano's 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. Trucano's 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. Trucano's attorney also wrote, " ...