Elder v. Elder

549 S.W.3d 919
CourtCourt of Appeals of Arkansas
DecidedMay 2, 2018
DocketNo. CV–17–991
StatusPublished
Cited by4 cases

This text of 549 S.W.3d 919 (Elder v. Elder) is published on Counsel Stack Legal Research, covering Court of Appeals of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Elder v. Elder, 549 S.W.3d 919 (Ark. Ct. App. 2018).

Opinion

I. Facts

Chris and Kerri divorced pursuant to a final order entered on October 14, 2015. At the time of divorce, the parties were real estate investors in Northwest Arkansas with a marital estate that included several million dollars' worth of income-producing property, most of which they handled by incorporating into the divorce decree a settlement agreement that divided the real properties they owned. Paragraph 11 of the order provided that each would have

the right of first refusal if the other elects to sell ... any of the properties awarded to them herein.... Failure to give notice of a party's election to exercise this first option within 10 days of being notified of the proposed sale shall be deemed a waiver of such a right.

The parties negotiated this right of first refusal because they each owned income-producing property in the same subdivisions; accordingly, each had an interest in acquiring the properties awarded to the other.

It is undisputed that the right-of-first-refusal language in the order was "short on detail" and provided neither the content of the notice to be sent when properties were to be sold nor the contents of any notice by the optionee to indicate a desire to exercise the right of first refusal. It simply provided that the failure to elect within ten days operated as a waiver of the right.

Chris planned to sell several of the parcels of real property awarded to him in the divorce. On February 7, 2017, he sent notice to Kerri in the form of a text stating that he was going to sell eight Stonegate duplexes for $215,000 and triplexes for $315,000. He indicated that he was sure she was not interested in buying, but that he was letting her know. In response, Kerri said she would like "to discuss the duplexes," but her response dealt primarily with a promissory note she held on which Chris was obligor.

Chris replied on February 13, 2017, that he had been informed by his attorney that Kerri might be interested in exercising her right to purchase the duplexes and that "if so, I need to know right away." Kerri sent no additional communication regarding the duplexes within ten days of that message from Chris because she was waiting for him to send her copies of the contracts he had obtained on those properties.

On March 25, 2017, Chris's assistant emailed to Kerri offers and acceptances regarding five additional lots that showed addresses and prices but redacted the buyers names and signatures. Kerri did not declare within ten days of the email that she wanted to buy any of these properties.

*922Certain of these contracts were set to close on May 5, 2017.

On April 13, 2017, Chris sent Kerri full copies of the deeds of the eight lots he had under contract in February. Kerri again did not notify Chris within ten days of her intent to purchase any of these properties.

On May 3, 2017, Kerri filed an emergency motion for preliminary injunction and a motion for declaration regarding the parties' rights of first refusal, wherein she alleged that Chris had sold eight lots in the Stonegate subdivision (Eight Lots) and planned to sell an additional five lots in the Stonegate subdivision (Five Lots), all in contravention of her right of first refusal.1 Kerri filed the motion for a preliminary injunction to halt the May 5, 2017 sales and requested a lis pendens be placed on every property that Chris owned, even those not in issue. Her motion acknowledged that she had been notified of Chris's plans to sell both the Eight Lots and the Five Lots but alleged that the notices were inadequate. Kerri also requested a declaration specifically defining the notice required by the final order. Kerri did not request that the trial court issue a show cause order to Chris, and the motion did not expressly seek a finding of contempt. Paragraph 21 of Kerri's motion did request an order "declaring that Chris Elder failed to substantially comply with the terms of the [Final Order] when he sold the [Eight Lots] that have already closed."

At the close of the hearing held on May 25, 2017, the trial court announced that the notice sent on March 27, 2017, with respect to the Five Lots that were scheduled to close starting May 5, 2017, was adequate, but that the notice sent on the Eight Lots under contract in February 2017 was inadequate. The trial court held Chris in contempt for his failure to provide Kerri her right of first refusal as to the Eight Lots, in direct violation of the trial court's final order, and directed Kerri to file a motion for attorney's fees within ten days of the entry of the order. The following day, Chris requested the trial court to reconsider its contempt finding, but his motion was denied on June 7, 2017. The final order was filed June 20, 2017. On July 3, 2017, Kerri filed a motion for a new trial. The trial court took no action; accordingly, it was deemed denied on August 2, 2017. Chris filed a notice of appeal on August 3, 2017, and Kerri filed a notice of cross-appeal on August 10, 2017.

When the notices of appeal were filed, there was pending before the trial court Kerri's motion for attorney's fees. Before the record was lodged in this court, the trial court on October 4, 2017, awarded attorney's fees to Kerri. Chris filed a second notice of appeal on October 5, 2017, including the order awarding fees and continuing his first notice of appeal.

II. Discussion

A. Direct Appeal

With respect to our standard of review, a finding of indirect contempt is reviewable de novo. Jones v. Jones , 320 Ark. 449, 898 S.W.2d 23 (1995). The trial court found Chris in contempt for violating the final order's right of first refusal. A right of first refusal is triggered only after the owner (1) receives an acceptable offer and (2) notifies the right holder of such offer. 3 Arthur L. Corbin, Corbin on Contracts § 11.3 (rev. ed. 1996). Courts agree that, at a minimum, notice must reasonably disclose the terms of the sale to trigger the right of first refusal. See, e.g. , John D. Stump & Assoc., Inc. v. Cunningham Mem. Park, Inc. , 187 W.Va. 438, 419 S.E.2d 699, 706 (Va. 1992)

*923.

Chris challenges the trial court's finding him in contempt for the February 2017 sales of the Eight Lots without having given "adequate notice" to Kerri. Chris argues that the finding was erroneous because it was not based on a violation of any explicit statement in the final order either obliging him to offer notice or detailing how specific his conduct had to be. He further argues that the finding of contempt was entered without previous notice to him that he was being charged with contempt-notice that would have allowed him to offer "advice of counsel" defenses.

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Cite This Page — Counsel Stack

Bluebook (online)
549 S.W.3d 919, Counsel Stack Legal Research, https://law.counselstack.com/opinion/elder-v-elder-arkctapp-2018.