Feider v. Feider
699 P.2d 801, 40 Wash. App. 589 (1985)
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Rule of Law:
A right of first refusal is a personal contract that is only valid for a reasonable time if no duration is specified. For such a right to be a covenant running with the land and thus enforceable by successors, it must satisfy strict requirements, including horizontal privity and that it 'touches and concerns' the land.
Facts:
- In June 1951, brothers Francis A. Feider and Andrew Feider acquired adjoining parcels of land following a partition of inherited property.
- Andrew Feider's access to his land was provided by an easement over Francis Feider's parcel.
- On October 15, 1951, Francis granted Andrew a right of first refusal in a written agreement, stating that if Francis, his heirs, or assigns elected to sell, the property must first be offered to Andrew.
- The agreement also stated, 'this option shall be considered a covenant running with the lands owned by [Andrew].'
- Andrew Feider later died.
- On March 17, 1980, twenty-nine years after the agreement was made, Francis sold his parcel to Karl and Bertha Hecht without first offering it to Andrew's children.
Procedural Posture:
- On May 10, 1982, Andrew Feider's children (plaintiffs) sued Francis Feider and the Hechts (defendants) in a state trial court, seeking specific performance or damages.
- The plaintiffs moved for summary judgment.
- The trial court denied the plaintiffs' motion and granted summary judgment in favor of the defendants, dismissing the action.
- The trial court held the agreement was a personal contract, not a real covenant, and that its effective duration of a 'reasonable time' had expired.
- The plaintiffs (appellants) appealed the trial court's decision to the Court of Appeals of Washington (intermediate appellate court).
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Issue:
Is a right of first refusal, which recites that it is a covenant running with the land, enforceable by the heirs of the original beneficiary nearly three decades after its creation if the agreement lacks horizontal privity and does not 'touch and concern' the land?
Opinions:
Majority - Green, C.J.
No, the right of first refusal is not enforceable by the heirs. The agreement created a personal right, not a covenant running with the land, and in any event, the right expired after a reasonable period of time had passed. The court provided two independent reasons for its holding. First, the agreement failed as a covenant running with the land because it did not meet the necessary legal requirements. Specifically, it lacked horizontal privity, as the right was not created in conjunction with a transfer of an estate in land between the parties. It also did not 'touch and concern' the land, as a right of first refusal does not create an interest in land and there was no evidence it affected the value of either parcel. Second, because the agreement did not state a duration, it is presumed to be effective only for a reasonable time. The court concluded that 29 years, during which the agreement was never recorded or inventoried in Andrew's or his wife's estates, was an unreasonable length of time as a matter of law.
Analysis:
This case illustrates the judiciary's strict application of the formal requirements for creating real covenants, emphasizing that merely labeling an agreement a 'covenant running with the land' is insufficient. By refusing to enforce the agreement, the court affirmed that rights of first refusal are generally construed as personal contracts that do not bind successors unless they satisfy the tests of horizontal privity and 'touch and concern.' The decision also solidifies the 'reasonable time' limitation on preemptive rights of unspecified duration, extending the principle from the commercial context of Robroy to a non-commercial, family agreement, thereby limiting the potential for such rights to cloud title indefinitely.
