James C. Donnan and Treasa Lynn Donnan v. T. Carroll Estes; Annette Estes; Estes Investments, LLC; and Estes Investments, LLC–Series 8

Summary

The Texas Court of Appeals, Third District, affirmed summary judgment for the defendants in a dispute involving an alleged violation of the plaintiffs’ contractual right of first refusal to purchase real property. The court held that documents providing information about the prior sale reasonably satisfied the right-of-first-refusal contract and triggered the plaintiffs’ 30-day period to exercise their purchase right in writing. Because the plaintiffs did not timely provide written notice of exercise, their rights lapsed and the defendants were entitled to judgment and potentially contractual or statutory attorney’s fees.

Holdings

1. A transfer of property in violation of a right of first refusal is equivalent to an offer that the owner failed to make, and reasonable information about that prior sale can trigger the rightholder's contractual duty to exercise the right within the specified period.
2. The purchase contract and settlement statement sent on December 3, 2021, reasonably satisfied the material disclosure requirements of the right-of-first-refusal contract and, as a matter of law, triggered the Donnans' thirty-day exercise period.
3. The reasonableness of the information supplied may be decided as a matter of law when the evidence permits only one rational inference; therefore, summary judgment was not precluded merely because reasonableness is often a fact question.
4. The Donnans did not timely exercise their right of first refusal because the contract required a written exercise and their attorney's oral statement of intent was insufficient.
5. The later sale of ten acres to RTJ did not control the exercise period; the triggering event was the earlier violative sale by the De Lange trust to the Estes Parties and the Donnans' receipt of reasonable information about that sale.
6. Because the Estes Parties prevailed, they were entitled to recover reasonable attorney's fees under the right-of-first-refusal contract and/or the Texas Uniform Declaratory Judgments Act.

Questions Presented

1. Whether the documents sent on December 3, 2021, provided sufficient information about the prior violative sale to trigger the Donnans' contractual thirty-day period to exercise their right of first refusal.
2. Whether the reasonableness of the information supplied was necessarily a fact question precluding summary judgment.
3. Whether the Donnans' attorney's oral statement of intent to purchase constituted a timely exercise of the right of first refusal despite the contract's written-exercise requirement.
4. Whether the subsequent sale of ten acres to RTJ, rather than the earlier sale to the Estes Parties, triggered the exercise period.
5. Whether the Estes Parties were entitled to attorney's fees.

Disposition

affirmed