Kutkowski v. Princeville Prince Golf Course, LLC

Summary

The Supreme Court of Hawai‘i considered whether the sale of a 1,040-acre parcel triggered a lessee’s right of first refusal concerning a smaller half-acre parcel within it. The court adopted the minority rule that, under the specific circumstances, the sale of the larger parcel manifested an intent to sell the smaller parcel and triggered the right of first refusal. It reversed the Intermediate Court of Appeals’ judgment and remanded for further proceedings.

Holdings

1. The right of first refusal survived into the month-to-month holdover period and remained enforceable against PPGC as successor to the original licensor.
2. Under the circumstances of this case, the sale of the undivided larger parcel necessarily included the smaller premises and triggered the right of first refusal.
3. PPGC could not avoid the right of first refusal by asserting that subdivision or conveyance of the half-acre was legally impossible; the agreement required the licensor to offer the premises on terms and conditions it set, which could account for subdivision, variance, condominium, or other implementation options.
4. Specific performance was appropriate because PPGC, as successor licensor, was required to offer the property to Kutkowski pursuant to the right of first refusal.

Questions Presented

1. Whether the right of first refusal survived after expiration of the fixed term while Kutkowski remained as a month-to-month holdover tenant.
2. Whether the sale of an undivided larger parcel containing the leased smaller parcel triggered the lessee’s right of first refusal over the smaller parcel.
3. Whether specific performance was an available remedy and whether PPGC was required to offer the property to Kutkowski on terms and conditions set by PPGC.

Disposition

reversed_and_remanded