                                                                              FILED
                                                                         May 30 2017, 10:30 am

                                                                              CLERK
                                                                          Indiana Supreme Court
                                                                             Court of Appeals
                                                                               and Tax Court




ATTORNEYS FOR APPELLANTS                                 ATTORNEYS FOR APPELLEES
Tracy D. Knox                                            John A. Conway
Brian E. Casey                                           Paul Edgar Harold
Barnes & Thornburg LLP                                   Stephen M. Judge
South Bend, Indiana                                      LaDue Curran & Kuehn LLC
                                                         South Bend, Indiana



                                           IN THE
    COURT OF APPEALS OF INDIANA

B&R Oil Company, Inc.,                                   May 30, 2017
Empire Petroleum Partners,                               Court of Appeals Case No.
LLC, and EPP-Atlas                                       71A04-1603-PL-608
Acquisition, LLC,                                        Appeal from the St. Joseph Circuit
Appellants-Defendants,                                   Court
                                                         The Honorable Michael G.
        v.                                               Gotsch, Judge
                                                         Trial Court Cause No.
William E. Stoler, Kathlyn                               71C01-1412-PL-353
Stoler, Jeffrey A. Levy, and
Con-Serve, Inc.,
Appellees-Plaintiffs.




Najam, Judge.




Court of Appeals of Indiana | Opinion 71A04-1603-PL-608 | May 30, 2017                            Page 1 of 22
                                         Statement of the Case
[1]   B&R Oil Company, Inc. (“B&R Oil”), Empire Petroleum Partners, LLC, and

      EPP-Atlas Acquisitions, LLC (we refer to the LLCs collectively as “Empire”)

      bring this interlocutory appeal from the trial court’s entry of summary judgment

      for William E. Stoler, Kathlyn Stoler, Jeffrey A. Levy, and Con-Serve, Inc.

      (collectively referred to as “the Stolers”) on the Stolers’ complaint for breach of

      contract against B&R Oil. B&R Oil and Empire raise three issues for our

      review, which we consolidate and restate as whether the undisputed designated

      evidence demonstrates, as a matter of law, that B&R Oil breached its lease

      agreements with the Stolers. As a matter of first impression in Indiana, we hold

      that a lessor may not circumvent a lessee’s contractual right of first refusal to

      purchase the leased premises by submitting a third-party offer to the lessee in

      which the leased premises are bundled with other property. Accordingly, we

      affirm the trial court’s summary judgment for the Stolers.


                                   Facts and Procedural History1
[2]   Beginning in the 1990s, the Stolers leased several parcels of real property from

      B&R Oil and began to operate gas stations on those properties. The leases were

      for initial three-year terms with options to renew. The Stolers regularly

      renewed their leases and continually operated the gas stations since first leasing

      the properties.




      1
          We held oral argument on April 11, 2017.

      Court of Appeals of Indiana | Opinion 71A04-1603-PL-608 | May 30, 2017     Page 2 of 22
[3]   Pursuant to the lease agreements, the Stolers held rights of first refusal

      (“ROFR”) that protected them against a third-party purchase of the leased

      premises. Specifically, each identical ROFR stated:


              The Lessor hereby agrees that Lessees shall have, during the term
              of this lease, and so long as Lessees are in compliance with the
              terms hereof, the right of first refusal to purchase the leased premises.
              Accordingly, in the event that a bona fide offer to purchase the
              leased premises is presented to Lessor, Lessor shall give Lessees
              Fifteen (15) days for Lessees to make to Lessor a firm
              commitment to match said offer and to seek financing for the
              purchase of the property at said purchase price before Lessor sells
              its interest in the leased premises to a third party. Said Fifteen
              (15) day period shall commence when Lessors give to Lessee
              written notice of a bona fide offer to purchase. It is further
              agreed that, in the event that this right of first refusal is exercised
              by Lessees, that Lessor shall extend to Lessees the same terms for
              purchase that were extended to the party who originally made
              the bona fide offer to purchase which triggered the terms
              hereunder.


      Appellants’ App. Vol. V at 46, 59 (emphases added).


[4]   In 2014, B&R Oil signed a letter of intent to sell substantially all of its assets to

      Empire for approximately $80,000,000. Empire’s purchase offer included the

      premises leased to the Stolers, at least sixteen other parcels of real property, fuel

      supply contracts for more than 100 sites, and various pieces of equipment.

      Thereafter, B&R Oil notified the Stolers that it had received Empire’s third-

      party offer to purchase the leased premises and, accordingly, that B&R Oil was

      providing the Stolers “with a right of first refusal to purchase the Premises on



      Court of Appeals of Indiana | Opinion 71A04-1603-PL-608 | May 30, 2017          Page 3 of 22
      the same terms and conditions set forth” by Empire within fifteen days of the

      notices. Id. at 71, 75.


[5]   The Stolers responded to B&R Oil and stated their intent to exercise the ROFR

      in each lease. Specifically, the Stolers informed B&R Oil that they would

      match Empire’s offer “for the Premises” and requested that B&R Oil provide

      additional information regarding Empire’s terms with respect to only the leased

      premises. Id. at 79-80. However, B&R Oil responded and informed the Stolers

      that, if they wished to exercise their ROFR, they would “be required to match

      the Offer and tender $80,000,000 for the Premises and all other assets included

      in the Offer.”2 Id. at 81, 83. The Stolers challenged B&R Oil’s interpretation of

      the contract, stating that the attempt by B&R Oil “to force [the Stolers] to

      purchase substantially all of B&R [Oil’s] assets to exercise their respective rights

      of first refusal constitutes both an anticipatory repudiation of the parties’ leases

      and a[] breach of those leases.” Id. at 86.


[6]   On December 22, 2014, the Stolers filed their lawsuit against B&R Oil and

      Empire. In their complaint, the Stolers alleged that B&R Oil had breached the

      lease agreements by not allowing the Stolers to purchase the leased premises

      before selling the premises to Empire. The Stolers sought monetary damages,

      specific performance, and/or injunctive relief. After the trial court denied the

      Stolers’ requests for a temporary restraining order and a preliminary injunction,


      2
        We note that, notwithstanding B&R Oil’s representations to the contrary, the record demonstrates that
      Empire had determined values for the specific properties at issue in this appeal. See Appellants’ App. Vol. V
      at 157.

      Court of Appeals of Indiana | Opinion 71A04-1603-PL-608 | May 30, 2017                            Page 4 of 22
      B&R Oil and Empire closed their transaction, and B&R Oil assigned the

      Stolers’ lease agreements to Empire.


[7]   Thereafter, the parties each moved for summary judgment. After a hearing, the

      trial court granted partial summary judgment for the Stolers on their claim of

      breach of the lease agreements. The court denied summary judgment for B&R

      Oil and Empire and withheld ruling on the Stolers’ proper remedy. The trial

      court certified its order for interlocutory appeal, which we accepted.


                                     Discussion and Decision
                                                   Overview

[8]   B&R Oil and Empire (hereinafter collectively referred to as “B&R Oil”) appeal

      the court’s summary judgment for the Stolers. Our standard of review is clear:


              We review summary judgment de novo, applying the same
              standard as the trial court: “Drawing all reasonable inferences in
              favor of . . . the non-moving parties, summary judgment is
              appropriate ‘if the designated evidentiary matter shows that there
              is no genuine issue as to any material fact and that the moving
              party is entitled to judgment as a matter of law.’” Williams v.
              Tharp, 914 N.E.2d 756, 761 (Ind. 2009) (quoting T.R. 56(C)). “A
              fact is ‘material’ if its resolution would affect the outcome of the
              case, and an issue is ‘genuine’ if a trier of fact is required to
              resolve the parties’ differing accounts of the truth, or if the
              undisputed material facts support conflicting reasonable
              inferences.” Id. (internal citations omitted).


              The initial burden is on the summary-judgment movant to
              “demonstrate [ ] the absence of any genuine issue of fact as to a
              determinative issue,” at which point the burden shifts to the non-

      Court of Appeals of Indiana | Opinion 71A04-1603-PL-608 | May 30, 2017    Page 5 of 22
               movant to “come forward with contrary evidence” showing an
               issue for the trier of fact. Id. at 761-62 (internal quotation marks
               and substitution omitted). And “[a]lthough the non-moving
               party has the burden on appeal of persuading us that the grant of
               summary judgment was erroneous, we carefully assess the trial
               court’s decision to ensure that he was not improperly denied his
               day in court.” McSwane v. Bloomington Hosp. & Healthcare Sys.,
               916 N.E.2d 906, 909-10 (Ind. 2009) (internal quotation marks
               omitted).


       Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014) (alterations original to

       Hughley).


[9]    Here, the trial court entered detailed findings of fact and conclusions thereon in

       its summary judgment order. While such findings and conclusions are not

       required in a summary judgment and do not alter our standard of review, they

       are helpful on appeal for us to understand the reasoning of the trial court. See

       Knighten v. E. Chicago Hous. Auth., 45 N.E.3d 788, 791 (Ind. 2015). We also

       note that the trial court had before it cross-motions for summary judgment, but

       that also does not alter our standard of review. Id.


[10]   This appeal requires the interpretation of a contract. Interpretation and

       construction of contract provisions are questions of law. John M. Abbott, LLC v.

       Lake City Bank, 14 N.E.3d 53, 56 (Ind. Ct. App. 2014). As such, cases involving

       contract interpretation are particularly appropriate for summary judgment. Id.

       And because the interpretation of a contract presents a question of law, it is

       reviewed de novo by this court. Jenkins v. S. Bend Cmty. Sch. Corp., 982 N.E.2d

       343, 347 (Ind. Ct. App. 2013), trans. denied.

       Court of Appeals of Indiana | Opinion 71A04-1603-PL-608 | May 30, 2017         Page 6 of 22
[11]   We review the contract as a whole, attempting to ascertain the parties’ intent

       and making every attempt to construe the contract’s language “so as not to

       render any words, phrases, or terms ineffective or meaningless.” Four Seasons

       Mfg., Inc. v. 1001 Coliseum, LLC, 870 N.E.2d 494, 501 (Ind. Ct. App. 2007).

       “And, in reading the terms of a contract together, we keep in mind that the

       more specific terms control over any inconsistent general statements.” DLZ

       Ind., LLC v. Greene Cty., 902 N.E.2d 323, 328 (Ind. Ct. App. 2009).


[12]   The contracts at issue on appeal require our interpretation of right-of-first-

       refusal provisions. A right of first refusal is a “valuable contractual right” in

       which the right-holder may “preempt” a third-party offer for a protected

       interest. Hyperbaric Oxygen Therapy Sys., Inc. v. St. Joseph Med. Ctr. of Ft. Wayne,

       Inc., 683 N.E.2d 243, 248 (Ind. Ct. App. 1997) (quoting 3 Arthur Linton Corbin

       & Eric Mills Holmes, Corbin on Contracts § 11.3 at 468-69 (rev. ed. 1996)),

       trans. denied; Arlington State Bank v. Colvin, 545 N.E.2d 572, 578 (Ind. Ct. App.

       1989), trans. denied. It is a “dormant” right “that does not entitle the holder to

       take any action until receipt of a bona fide offer.” Beiger Heritage Corp. v. Estate

       of Kilbey, 667 N.E.2d 184, 186 (Ind. Ct. App. 1996), trans. denied. With respect

       to real property interests, once a property owner communicates a bona fide

       third-party offer to the right-holder, the right of first refusal is “transmuted into

       an option.” Id. “An option is a continuing offer whose duration and method of

       exercise is strictly controlled by the agreement that created it.” Id.


[13]   Again, the ROFR at issue in this appeal states:



       Court of Appeals of Indiana | Opinion 71A04-1603-PL-608 | May 30, 2017      Page 7 of 22
               The Lessor hereby agrees that Lessees shall have, during the term
               of this lease, and so long as Lessees are in compliance with the
               terms hereof, the right of first refusal to purchase the leased premises.
               Accordingly, in the event that a bona fide offer to purchase the
               leased premises is presented to Lessor, Lessor shall give Lessees
               Fifteen (15) days for Lessees to make to Lessor a firm
               commitment to match said offer and to seek financing for the
               purchase of the property at said purchase price before Lessor sells
               its interest in the leased premises to a third party. Said Fifteen
               (15) day period shall commence when Lessors give to Lessee
               written notice of a bona fide offer to purchase. It is further
               agreed that, in the event that this right of first refusal is exercised
               by Lessees, that Lessor shall extend to Lessees the same terms for
               purchase that were extended to the party who originally made
               the bona fide offer to purchase which triggered the terms
               hereunder.


       Appellants’ App. Vol. V at 46, 59 (emphases added).


[14]   On appeal, B&R Oil first argues that the $80,000,000 purchase offer did not

       trigger the Stolers’ ROFR because the $80,000,000 offer was not an offer for

       only the leased premises. In the alternative, B&R Oil argues that, if the offer

       was an offer for the leased premises, B&R Oil complied with the ROFR when it

       gave the Stolers the opportunity to match the $80,000,000 offer. We address

       each argument in turn.


                            Whether Empire’s Offer Triggered the ROFR

[15]   We first consider B&R Oil’s argument that the $80,000,000 purchase offer did

       not trigger the Stolers’ ROFR. We cannot agree. According to the ROFR, the

       right is triggered when there is a “bona fide offer to purchase the leased


       Court of Appeals of Indiana | Opinion 71A04-1603-PL-608 | May 30, 2017          Page 8 of 22
       premises.” Id. One significant reason for a lessee to negotiate for a ROFR is to

       protect the lessee from being forced into a relationship with an unknown third-

       party lessor. Here, the $80,000,000 offer sought, albeit among other things, to

       purchase the leased premises. And the offer, once finalized, forced the Stolers

       into a relationship with an unknown third party as their new lessor. While, as

       discussed below, the Empire offer was nonconforming, the offer nevertheless

       included an offer to purchase the leased premises, which confronted the Stolers

       with the prospect of a new lessor. Thus, we conclude that the $80,000,000 offer

       triggered the ROFR and the Stolers’ option to purchase the leased premises.


                         Whether B&R Oil Breached the Lease Agreements

[16]   We next turn to B&R Oil’s alternative argument on appeal, namely, that it

       complied with the ROFR when it presented the Stolers with an opportunity to

       match the $80,000,000 offer. We agree with the trial court that the undisputed

       material facts in this case demonstrate that B&R Oil breached the lease

       agreements when B&R Oil sought “to nullify the ROFR by allowing the leased

       premises to be sold in conjunction with other parcels as part of a package

       deal . . . .” Appellants’ App. Vol. VI at 170.


[17]   On appeal, both parties contend that the other’s interpretation of the ROFR

       would require that additional terms be added to the text of the ROFR. B&R

       Oil contends that the Stolers’ interpretation would require this court to add the

       term “exclusively” to the ROFR such that it provides for a right “to purchase

       the leased premises exclusively.” See Appellants’ Br. at 44, 53. At the same


       Court of Appeals of Indiana | Opinion 71A04-1603-PL-608 | May 30, 2017    Page 9 of 22
       time, the Stolers contend that B&R Oil’s interpretation would require this court

       to add the phrase “along with any other offered property” to the ROFR such

       that it includes a right “to purchase the leased premises along with any other

       offered property.” See Appellees’ Br. at 36. In advancing these arguments, each

       side contends, in effect, that its own interpretation of the ROFR must be

       unambiguous because the other’s interpretation requires supplying missing

       terms. But the fact that the parties disagree over the meaning of the contract

       does not, in and of itself, establish an ambiguity. Claire’s Boutiques, Inc. v.

       Brownsburg Station Partners LLC, 997 N.E.2d 1093, 1097 (Ind. Ct. App. 2013).

       Nor may a court write a new contract for the parties or supply missing terms.

       Id. at 1098. We must interpret the contract as written, not as it might have been

       written.


[18]   The contracts as written are unambiguous and do not require the addition of

       missing terms. “Leased premises” can only mean one thing—it is the property

       leased by the Stolers. When a contract is clear and unambiguous, the language

       must be given its plain meaning. Van Prooyen Builders, Inc. v. Lambert, 907

       N.E.2d 1032, 1035 (Ind. Ct. App. 2009). There is nothing in the text of the

       ROFR that states, expressly or implicitly, that the ROFR applies to any other

       property. See Ryan v. Lawyers Title Ins. Corp., 959 N.E.2d 870, 877-78 (Ind. Ct.

       App. 2011) (holding that a right of first refusal did not state expressly or

       implicitly that it was other than personal). And there is nothing in the text of

       the ROFR that suggests or would support an inference that the ROFR either

       grants a preemptive right to the Stolers—or requires the Stolers—to purchase


       Court of Appeals of Indiana | Opinion 71A04-1603-PL-608 | May 30, 2017      Page 10 of 22
       any property other than “the leased premises” should they exercise their right of

       first refusal. The leased premises was the only property within the

       contemplation of the parties when the leases were executed.


[19]   When interpreting a written contract, we attempt to determine the intent of the

       parties at the time the contract was made. Id. at 875. If necessary, the text of a

       disputed provision may be understood by reference to other provisions within

       the four corners of the document. Claire’s Boutiques, 997 N.E.2d at 1098. Here,

       not only the text of the ROFR itself but also the lease agreements as a whole

       make the intent of the parties clear. Each lease agreement pertains to only a

       single property described as “the leased premises.” Appellants’ App. Vol. V at

       37, 52. Since the leases refer only to “the leased premises” and not to any other

       property, it follows that each ROFR encompasses only one property. Whether

       we consider the plain meaning of the ROFR in itself or the lease as a whole, we

       cannot say that the inclusion of any property other than “the leased premises”

       may reasonably have been within the contemplation of the parties at the time

       the leases were executed.


[20]   Accordingly, it is the Stolers’ interpretation of the ROFR that is consistent with

       the lease agreements as a whole. That is, the Stolers’ interpretation of the

       ROFR is the reading that reflects the intent of the parties to the lease

       agreements. As such, we conclude that each ROFR means that, upon B&R

       Oil’s presentation of a conforming third-party offer, the right-holder will have

       the option to purchase the leased premises and only the leased premises.



       Court of Appeals of Indiana | Opinion 71A04-1603-PL-608 | May 30, 2017     Page 11 of 22
[21]   Further, B&R Oil’s interpretation of the ROFR could yield an absurd result.

       There were several B&R Oil leases with identical ROFR provisions. Thus, had

       two or more of the lessees agreed to match the $80,000,000 Empire offer, there

       would have been competing and irreconcilable options to purchase the same

       properties, including options to purchase each other’s leased premises. The

       ROFR of each lessee would not have been preemptive or exclusive but would

       have been in direct conflict with the option rights of another lessee or lessees.

       The parties could not have intended that the ROFR would permit such an

       untenable collision of rights between or among the lessees.


[22]   And B&R Oil’s reading of the ROFR is implausible for other reasons. Empire’s

       offer was a part-cash, part-stock offer. As such, it would have been impossible

       for the Stolers to offer stock and to match the terms of the offer.3 And it was

       also unlikely that the parties to the lease agreements anticipated that the

       purchase price for a single gas station would amount to as much as

       $80,000,000. A purchase price of that magnitude would not have been within

       the reasonable contemplation of the parties when they negotiated the ROFR for

       “the leased premises.” We agree with the trial court that, in its operation and

       effect, B&R Oil’s interpretation of the ROFR nullifies the right of first refusal.




       3
          Even if we were to accept B&R Oil’s interpretation of the ROFR, which we do not, we would still be
       obliged to hold that B&R Oil breached the lease agreements. Empire’s offer to B&R Oil was to pay
       $48,000,000 in cash and the remainder in equity ownership in Empire, along with other consideration.
       Appellants’ App. Vol. V. at 108, 112. The ROFR required that B&R Oil present those terms to the Stolers,
       id. at 46, 59, but B&R Oil did not do so. Instead, B&R Oil omitted the details of Empire’s payment structure
       and implied to the Stolers that they were required to pay $80,000,000 in cash to exercise their rights under
       each ROFR.

       Court of Appeals of Indiana | Opinion 71A04-1603-PL-608 | May 30, 2017                         Page 12 of 22
                                            The Hamlin Doctrine

[23]   In addition to the legal and practical implausibility of B&R Oil’s interpretation

       of the ROFR, a party to a contract that contains a ROFR may not circumvent

       that provision merely by presenting to the right-holder a third-party offer that

       includes other unrelated property. In Hamlin v. Steward, 622 N.E.2d 535, 540

       (Ind. Ct. App. 1993), this court held that a party may not rely on the failure of a

       contractual condition precedent to excuse performance where that party’s own

       inaction caused the failure. The Indiana Supreme Court has agreed, concluding

       that “[t]he Hamlin doctrine prevents a party from acts of contractual sabotage or

       other acts in bad faith by a party that causes the failure of a condition.” Ind.

       State Highway Comm’n v. Curtis, 704 N.E.2d 1015, 1019 (Ind. 1998).


[24]   Under the ROFR, B&R Oil retains control over the condition precedent of a

       third-party offer, and B&R Oil can satisfy that condition only by presenting an

       offer to the lessees that conforms with the ROFR. Instead, here, B&R Oil

       breached its obligation and caused the failure of the condition precedent when it

       presented the Stolers with a nonconforming third-party offer and then used the

       Stolers’ refusal to match that offer as an excuse to circumvent the ROFR and

       sell the leased premises to Empire. B&R Oil caused the failure of the condition

       precedent by presenting a nonconforming offer to purchase, which included

       unrelated properties. In so doing, contrary to the Hamlin doctrine, B&R Oil

       sabotaged the ROFR.


[25]   Thus, B&R Oil may not engage in contractual sabotage by means of its own

       inaction. Hamlin, 622 N.E.2d at 540. B&R Oil acted as a mere conduit
       Court of Appeals of Indiana | Opinion 71A04-1603-PL-608 | May 30, 2017   Page 13 of 22
       between Empire and the Stolers. But the ROFR provisions imposed an

       affirmative duty on B&R Oil either to exclude the leased properties from the

       third-party offer or to allocate and attribute a portion of the purchase price to

       the leased premises so that each of the right-holders could exercise their rights

       under the ROFR. B&R Oil simply presented the third-party offer “as is” to the

       Stolers, an offer which bundled the leased properties with other property

       interests unrelated to the leased premises. B&R Oil’s failure to comply with the

       ROFR and to present a conforming third-party offer was a breach of the lease

       agreements.


[26]   Finally, our interpretation of the ROFR provisions brings Indiana’s

       jurisprudence in line with the substantial weight of authority from other

       jurisdictions that have considered such issues. See Maron v. Howard, 66 Cal.

       Rptr. 70, 78 (Cal. Ct. App. 1968) (“Recognizing [the lessee’s] rights under the

       agreement, [the lessors] could have allocated a portion of the total purchase

       price to the [leased] parcel and thus have given the [lessee] a clear opportunity

       to have exercised his right.”); Thomas & Son Transfer Line, Inc. v. Kenyon, Inc.,

       574 P.2d 107, 112 (Colo. App. 1977) (“An owner of property cannot defeat a

       right of refusal simply by selling the optioned property with other properties

       which he may own.”), aff’d, 586 P.2d 39, 40 (Colo. 1978); Whyhopen v. Via, 404

       So. 2d 851, 853 (Fla. Dist. Ct. App. 1981) (“[lessors’] argument that tenants

       were required to exercise their option as to all the land listed on the contract for

       sale is incorrect.”); Radio WEBS, Inc. v. Tele-Media Corp., 292 S.E.2d 712, 714-15

       (Ga. 1982) (“It is manifestly clear that [the parties to the contract] contemplated


       Court of Appeals of Indiana | Opinion 71A04-1603-PL-608 | May 30, 2017    Page 14 of 22
only the sale of the assets or stock of the [business] when the right of first refusal

was negotiated. . . . [T]o find otherwise would facilitate defeat of contractual

rights of first refusal by inclusion of extraneous matters.”); Kutkowski v.

Princeville Prince Golf Course, LLC, 300 P.3d 1009, 1016 (Haw. 2013) (“[the

lessor’s argument] renders ROFR’s [sic] over smaller parcels illusory upon the

lessor’s decision to include the smaller parcel as part of a larger property sale to

a third party, which does not enforce the parties’ bargain for a ROFR.”);

Gyurkey v. Babler, 651 P.2d 928, 933 (Idaho 1982) (“[the smaller lot] could not

be sold as part of a larger parcel as long as the lot was subject to [the] right of

first refusal.”); Myers v. Lovetinsky, 189 N.W.2d 571, 575 (Iowa 1971) (“This is a

case in which landlords sell the whole farm including the demised premises to

purchasers without separately pricing the demised premises and the rest of the

farm. . . . [T]he landlord breaches the tenant’s preferential right by so doing.”);

Anderson v. Armour & Co., 473 P.2d 84, 89 (Kan. 1970) (rejecting as “completely

untenable” the lessor’s argument that “the clause in question was not breached

because” the leased premises were within “a larger tract . . . [that] was disposed

of”); Straley v. Osborne, 278 A.2d 64, 70 (Md. 1971) (“the lessor cannot act in

derogation of the lessee’s ‘first option’ rights in the leased premises . . . . [T]o

rule otherwise would be to allow a lessor to render the lessee’s bargained for

‘first option’ a nullity by merely including it in a larger tract being offered for

sale.”); Plante v. Town of Grafton, 775 N.E.2d 1254, 1258 (Mass. App. Ct. 2002)

(“a seller may not defeat a right of first refusal by confronting the optionee with

terms that include acquisition of land in addition to that covered by the right.”);

Brenner v. Duncan, 27 N.W.2d 320, 322 (Mich. 1947) (“acceptance [of the third-
Court of Appeals of Indiana | Opinion 71A04-1603-PL-608 | May 30, 2017      Page 15 of 22
party offer] by plaintiffs was made impossible by the defendants. Defendant

[landowner] sold to [the third-party defendant] . . . the property covered by the

option together with the adjacent parcel for one stipulated price . . . . [This]

constituted a breach of contract.”); Guaclides v. Kruse, 170 A.2d 488, 495 (N.J.

Super. Ct. App. Div. 1961) (“We concur in the generally accepted view as to

the optionee’s right to an injunction to restrain a vitiating of its option by the

inclusion, in the owner’s prospective sale, of property in excess of that covered

by the option. To allow the owner of the whole to by-pass the optionee merely

by attaching additional land to the part under option would render nugatory a

substantial right which the optionee had bargained for and obtained.”); C&B

Wholesale Stationery v. S. De Bella Dresses, Inc., 349 N.Y.S.2d 751, 753 (N.Y. App.

Div. 1973) (“The lessor’s sale of the leased premises as part of the larger parcel

violated the first refusal clause of the lease.”); Stuart v. Stammen, 590 N.W.2d

224, 228 (N.D. 1999) (“When a party has a right of first refusal on specified

property, the seller cannot add additional property and make it part of the

package, thereby forcing the option holder to purchase the additional property

to exercise the option.”); Ollie v. Rainbolt, 669 P.2d 275, 281 (Okla. 1983) (“A

preemption-affected seller . . . should not be allowed to defeat or impair a

bargained-for ‘right of first refusal’ by a package-deal offer that includes

property which lies dehors the preemption obligation.”); Boyd & Mahoney v.

Chevron U.S.A., 614 A.2d 1191, 1194 (Pa. Super. Ct. 1992) (“Common sense

and the applicable case law of this jurisdiction require us to hold that a right of

first refusal as to the conveyance of a property cannot be defeated by including

that property in a multi-property or multi-asset transaction.”); Sawyer v.
Court of Appeals of Indiana | Opinion 71A04-1603-PL-608 | May 30, 2017     Page 16 of 22
Firestone, 513 A.2d 36, 40 (R.I. 1986) (“We agree with the majority view that a

seller may not defeat a right of first refusal by selling the property subject to the

right as part of a larger tract.”); Navasota Res., L.P. v. First Source Tex., Inc., 249

S.W.3d 526, 535 (Tex. App. 2008) (“Virtually every authority of which we are

aware agrees that the holder of a preferential right cannot be compelled to

purchase assets beyond those included within the scope of the agreement

subject to the preferential right in order to exercise that right.”); Landa v. Century

21 Simmons & Co., 377 S.E.2d 416, 421 (Va. 1989) (holding that the option

holders were “entitled to exercise their right of first refusal” with respect to the

premises “despite the fact that [the landowner] contracted . . . to sell the

[premises] along with a separate . . . parcel”); Wilber Lime Prods., Inc. v. Ahrndt,

673 N.W.2d 339, 656-57 (Wis. Ct. App. 2003) (“the sale of the entire 180-acre

farm . . . triggered [the] right of first refusal to the twenty-five acres. . . . The

twenty-five acres were sold, albeit as part of a package deal. [The option

holder] should therefore have had the right to purchase the land.”); Chapman v.

Mut. Life Ins. Co., 800 P.2d 1147, 1151 (Wyo. 1990) (“a preemptive right may

not be defeated by a sale of the property burdened by the right as part of a larger

tract. Any other result is necessarily unacceptable because . . . [it] would render

nugatory a substantial right . . . .”). But see Crow-Spieker #23 v. Robert L. Helms

Constr. & Dev. Co., 731 P.2d 348, 350 (Nev. 1987) (holding that a ROFR was not

implicated by the sale of the protected property as part of a larger sale

agreement, though noting that the court “would not condone an attempt to

evade [the right-holder’s] contractual rights by engineering the sale of a larger

parcel”); Advanced Recycling Sys., LLC v. Se. Props. Ltd. P’ship, 787 N.W.2d 778,
Court of Appeals of Indiana | Opinion 71A04-1603-PL-608 | May 30, 2017        Page 17 of 22
       785 (S.D. 2010) (holding that a third-party offer for a property protected by a

       ROFR as part of a package deal with other, unrelated property does not invoke

       the ROFR).


[27]   In sum, the designated evidence demonstrates that there is no genuine issue of

       material fact with respect to whether B&R Oil breached the lease agreements.

       Although B&R Oil presented the Stolers with a third-party offer to purchase the

       leased premises, B&R Oil did not present the Stolers with an exclusive option to

       purchase the leased premises, and only the leased premises identified in each

       lease agreement, as required by the ROFR. Thus, we affirm the trial court’s

       entry of summary judgment for the Stolers.


[28]   Affirmed.


       May, J., concurs.

       Bailey, J., dissents with separate opinion.




       Court of Appeals of Indiana | Opinion 71A04-1603-PL-608 | May 30, 2017   Page 18 of 22
                                                  IN THE
           COURT OF APPEALS OF INDIANA

       B&R Oil Company, Inc.,
       Empire Petroleum Partners, and
       EPP-Atlas Acquisition, LLC
       Appellants-Defendants,

               v.                                               Court of Appeals Case No.
                                                                71A04-1603-PL-608
       William E. Stoler, Kathlyn
       Stoler, Jeffrey A. Levy, and
       Con-Serve, Inc.,
       Appellees-Plaintiffs.




       Bailey, Judge, dissenting.


[29]   I agree with the majority that the package offer triggered the rights of first

       refusal (“ROFR”). The majority next concludes, however, that B&R Oil

       breached the ROFR when it gave the lessees the opportunity to match the

       package offer instead of obtaining an offer specific to each leased premises.

       Because I would instead conclude that B&R Oil met its obligations under the

       plain language of the contract, I must dissent.




       Court of Appeals of Indiana | Opinion 71A04-1603-PL-608 | May 30, 2017               Page 19 of 22
[30]   When the language of a contract is unambiguous, we are to “give effect to the

       parties’ intentions as expressed in the four corners of the instrument. Clear,

       plain, and unambiguous terms are conclusive of that intent. This court will not

       construe clear and unambiguous provisions, nor will we add provisions not

       agreed upon by the parties.” Hyperbaric Oxygen Therapy Sys., Inc. v. St. Joseph

       Med. Ctr. of Ft. Wayne, Inc., 683 N.E.2d 243, 247-48 (Ind. Ct. App. 1997), trans.

       denied. (internal quotation marks and citation omitted); see also Ryan v. TCI

       Architects/Engineers/Contractors, Inc., No. 49S02-1704-CT-253, slip op. at 6 (Ind.

       Apr. 26, 2017) (“In interpreting a contract, we ascertain the intent of the parties

       at the time the contract was made, as disclosed by the language used to express

       the parties’ rights and duties.”).


[31]   Here, the plain language of the contract dictates precisely what must happen

       when B&R Oil receives a triggering offer: “Lessor shall give Lessees Fifteen

       (15) days for Lessees to make to lessor a firm commitment to match said offer

       and to seek financing for the purchase of the property at said purchase price before

       Lessor sells its interest in the leased premises to a third party.” Appellant’s

       App. Vol. V at 46, 59 (emphases added). B&R Oil notified the lessees that it

       received a package offer, and the lessees declined to make a package purchase. 4

       Thus, applying the negotiated contract language—and only those agreed-to




       4
        The majority notes that even if it accepted B&R Oil’s interpretation of the ROFR, it would conclude that
       B&R Oil was in breach because it did not communicate the precise terms of the triggering offer. I see no
       breach, however, because the lessees rejected the opportunity to make a package purchase and none has
       contended that it would have made such a purchase.

       Court of Appeals of Indiana | Opinion 71A04-1603-PL-608 | May 30, 2017                         Page 20 of 22
       terms—I would conclude that B&R Oil did not breach the ROFR, and is

       therefore entitled to summary judgment.


[32]   In reaching an opposite conclusion, the majority characterizes B&R Oil’s

       actions as contractual sabotage because B&R failed to “present[] an offer to the

       lessees that conforms with the ROFR.” Slip op. at 13. But the contract does

       not define conforming or non-conforming offers, nor does it restrict the ROFR

       from applying to any offer that B&R Oil intended to accept. Rather, the

       defined right is the opportunity to match a third-party offer. Had the parties

       wished to restrict B&R Oil from passing through package offers, they could

       have readily done so.


[33]   The majority also expresses concern about what might have happened if, under

       B&R Oil’s interpretation, more than one lessee had wished to match the

       package deal. I would not, however, forecast “an untenable collision of rights,”

       slip op. at 12, but instead a predictable result. That is, a right of first refusal

       applies only where the seller intends to accept the third-party offer. See Hay v.

       Hay, 885 N.E.2d 21, 24 (Ind. Ct. App. 2008) (“A right of first refusal is a

       potential buyer’s contractual right to meet the terms of a third party’s offer if the

       seller intends to accept that offer.”) (internal quotation marks omitted). Had

       more than one party wished to make the package purchase, then I suspect that

       B&R Oil would have intended to accept the highest offer. See also “Right of

       First Refusal,” Black’s Law Dictionary (10th ed. 2014) (defining the right as

       “[a] potential buyer’s contractual right to meet the terms of a third party’s

       higher offer”). Indeed, no language in the ROFR prevents continued

       Court of Appeals of Indiana | Opinion 71A04-1603-PL-608 | May 30, 2017       Page 21 of 22
       negotiations, and nothing about B&R Oil’s interpretation necessarily yields a

       result more peculiar than that of any “seller’s market,” in which a seller seeks

       the best-possible deal while multiple parties jockey for the same property.


[34]   It should also be noted that the lessees’ rights were not nullified by the Empire

       sale, but instead remained unchanged. That is, when Empire purchased the

       properties from B&R Oil, the leases stood in full force, obligating Empire to

       comply with the ROFR for the entire term of each lease. Thus, should Empire

       wish to sell either property—individually or otherwise—Empire must do what

       B&R Oil has done, and give the lessees the opportunity to match a triggering

       offer, which is all that the ROFR contemplates.


[35]   Ultimately, I do not see a matter of first impression, but instead an ordinary

       matter of contract interpretation. Thus, I would apply Indiana’s approach to

       contract interpretation, which is both clear and predictable, even when the

       consequences of doing so might seem unfair: we treat bargained-for language as

       the parties’ intent. Applying that unambiguous language here, I would reverse

       and remand for entry of summary judgment in favor of B&R Oil and Empire.


[36]   I therefore respectfully dissent.




       Court of Appeals of Indiana | Opinion 71A04-1603-PL-608 | May 30, 2017   Page 22 of 22
