The Shefman Family Limited Partnership v. Los Gallos Mexican Restaurant, LLC

Summary

The Texas Court of Appeals, Third District, affirmed a partial-summary-judgment order holding that a tenant’s contractual right of first refusal remained valid and enforceable after the lease’s original term ended and the tenant became a month-to-month holdover tenant. The court concluded that, under Texas law, the prior lease terms continued to govern the holdover tenancy absent an agreement to the contrary. The court therefore upheld the tenant’s right to pursue specific performance and overruled the landlord’s sole issue.

Holdings

1. A right of first refusal contained in a commercial lease remains valid and enforceable during a month-to-month tenancy created by the lease's holdover provision.
2. The district court properly declared that Los Gallos's right of first refusal remained effective, that Los Gallos properly exercised it, and that Shefman had a duty to accept Los Gallos's offer.

Questions Presented

1. Whether a right of first refusal contained in a commercial lease remains valid and enforceable after the lease term expires and the tenant becomes a month-to-month tenant under the lease's holdover provision.
2. Whether the district court properly granted partial summary judgment declaring that Los Gallos's right of first refusal remained effective, that Los Gallos properly exercised it, and that Shefman had a duty to accept Los Gallos's offer.

Disposition

affirmed