J. Michael Tiner and Martha Tiner v. Cynthia Tiner Johnson

CourtCourt of Appeals of Texas
DecidedJune 8, 2022
Docket12-21-00174-CV
StatusPublished

This text of J. Michael Tiner and Martha Tiner v. Cynthia Tiner Johnson (J. Michael Tiner and Martha Tiner v. Cynthia Tiner Johnson) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
J. Michael Tiner and Martha Tiner v. Cynthia Tiner Johnson, (Tex. Ct. App. 2022).

Opinion

NO. 12-21-00174-CV

IN THE COURT OF APPEALS

TWELFTH COURT OF APPEALS DISTRICT

TYLER, TEXAS

J. MICHAEL TINER AND MARTHA § APPEAL FROM THE 294TH TINER, APPELLANTS § JUDICIAL DISTRICT COURT V.

CYNTHIA TINER JOHNSON, § VAN ZANDT COUNTY, TEXAS APPELLEE

OPINION Appellants J. Michael Tiner and Martha Tiner appeal from the trial court’s granting of summary judgment, followed by the entry of a final judgment, in favor of Appellee Cynthia Tiner Johnson in Johnson’s suit seeking a declaration that an option contract to purchase land is illegal and void, as well as removal of a cloud on her title. The Tiners also argue that the trial court erred by failing to reform the option to comply with the rule against perpetuities, and they maintain that the trial court erred by dismissing their counterclaim for breach of contract. We affirm the trial court’s judgment.

FACTUAL AND PROCEDURAL BACKGROUND On March 8, 1989, Johnson and the Tiners executed a Purchase and Sale Agreement (“the Agreement”) regarding real property located in Van Zandt County, Texas. Under the Agreement, the Tiners were the sellers, and Johnson was the buyer, of a fifty percent interest in the subject tract, for a purchase price of $50,800.87. Section 9 of the Agreement is entitled “OPTION and RIGHT OF FIRST REFUSAL.” Subsection 9.1 of the Agreement, entitled “Option,” provides as follows, in pertinent part: Purchaser hereby grants to Seller the option (the “Option”) . . . to repurchase the Property and any improvements subsequently located or constructed thereon . . . from Purchaser in accordance with the following requirements: (1) Seller must provide Purchaser with thirty (30) days[’] advance written notice of its intent to exercise this Option; (2) The consummation of the reconveyance of the Property and any new Improvements from Purchaser to Seller (the “Option Closing”) shall occur within thirty (30) days of Seller’s notice of its intent to exercise the Option; (3) At the Option Closing, Seller shall pay Purchaser a purchase price equal to the total of (i) the Purchase price . . . (iii) plus one-half (1/2) of the fair market value of all New Improvements, if any, located on the Property. . . .

Subsection (6) of Section 9.1 provides that the “Option shall commence upon the Closing, and shall automatically terminate on March 31, 2089[,] at 11:59 p.m.”1 In addition, Section 10.10 states that the Agreement “shall bind and inure to the benefit of Seller and Purchaser and their respective heirs, administrators, executors, successors[,] and assigns.” On March 17, 2019, Johnson filed a lawsuit against the Tiners, seeking a declaration that the option is void because it constitutes an unreasonable restraint on alienation and violates the rule against perpetuities. Johnson also sought removal of the cloud on her title caused by the option. In her petition, Johnson asserted that the Agreement unambiguously provides that the option does not expire upon the death of either the seller or the purchaser. Johnson alleged that the Agreement and the recorded Memorandum of Option and Right of First Refusal created a cloud on her title because the “purported ‘Option’ . . . by its terms, may be exercised at any time before March 31, 2089, at 11:59 p.m.” Johnson sought (1) a declaratory judgment that the option is illegal and void, and she therefore has no obligation to convey any interest in the property to the Tiners, (2) “an equitable decree removing the cloud on [her] title to the Property caused by the recorded Purchase and Sale Agreement and the recorded Memorandum of Option and Right of First Refusal[,]” (3) costs, and (4) attorney’s fees. Johnson pleaded that on March 20, 2019, an attorney representing the Tiners sent her a notice letter, which stated that the Tiners intend “to exercise their Option to repurchase their full fifty percent (50%) beneficial interest in the [p]roperty as set forth in Section 9.1 of the Agreement.” The letter stated that pursuant to the Agreement, the Tiners would pay a purchase price of $50,800.87 plus closing costs and recording fees. The notice letter stated that the Tiners filed the Agreement, as well as a document entitled “Memorandum of Option and Right of First Refusal,” in the official public records of Van Zandt County, Texas, on March 23, 2018.

1 Subsection 9.2 of the Agreement gave the Tiners a right of first refusal.

2 In their answer, the Tiners pleaded the affirmative defenses of (1) “unclean hands and/or estoppel,” (2) statute of limitations “and/or the doctrine of laches[,]” (3) waiver, (4) consent, and (5) acts of third parties over whom they lacked control. The Tiners also asserted a counterclaim for breach of contract, based upon Johnson’s refusal to convey the 50% interest in the property. Johnson entered a general denial of the allegations contained in the Tiners’ counterclaim and also asserted that the option violated the rule against perpetuities and constitutes an unreasonable restraint on alienation. Johnson filed a hybrid motion for summary judgment, in which she sought (1) a traditional motion for summary judgment as to her claims and the Tiners’ counterclaim, and (2) a no-evidence summary judgment as to the Tiners’ affirmative defenses. Johnson argued that the option is void because it violates the rule against perpetuities and constitutes an unreasonable restraint on alienation, and she asserted that there was no evidence of the Tiners’ affirmative defenses. Johnson’s motion requested a declaratory judgment that the option is illegal and void and she is not obligated to convey any interest in the property to the Tiners; an equitable decree removing the cloud on her title caused by the recorded Agreement and “the recorded Memorandum of Option and Right of First Refusal;” costs; post-judgment interest; necessary writs and processes to enforce the trial court’s judgment; and judgment that the Tiners take nothing as to their counterclaim. In addition to the Agreement and other documents related to the 1989 transaction between Johnson and the Tiners, Johnson attached as summary judgment evidence a signed contract to sell the property to a third party for $600,100. In their response to Johnson’s motion for summary judgment, the Tiners asserted that the option is enforceable because it is for a “limited and specific” duration, and the right to exercise the option is personal to the Tiners and does not pass to their heirs, administrators, executors, successors, and assigns. Specifically, the Tiners asserted that the option is not an unreasonable restraint on alienation and does not violate the rule against perpetuities, and they argued that genuine issues of material fact exist as to their affirmative defenses. The Tiners filed a motion for leave to file an amended answer and a supplemental response to Johnson’s motion for summary judgment. In their motion for leave, the Tiners asserted that Section 5.043 of the Texas Property Code mandates reformation of “commercial instruments creating property interests that violate the Rule against Perpetuities[,]” including the Agreement. See Yowell v. Granite Operating Co., 620 S.W.3d 335 (Tex. 2020). The Tiners sought “to assert

3 reformation as an affirmative defense” and “leave to file a Supplemental Response to Plaintiff’s Motion for Summary Judgment.” In her response to the Tiners’ motion for leave, Johnson asserted that the motion should be denied because it ignores her argument that the option constitutes an unreasonable restraint on alienation and that the motion “is based entirely on a recent case that has no bearing on any issue before the Court.” Johnson maintained that the trial court should grant her motion for summary judgment “based on the legal conclusion that the purported option is an unreasonable restraint on alienation.” The trial court did not rule on the Tiners’ motion for leave.

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J. Michael Tiner and Martha Tiner v. Cynthia Tiner Johnson, Counsel Stack Legal Research, https://law.counselstack.com/opinion/j-michael-tiner-and-martha-tiner-v-cynthia-tiner-johnson-texapp-2022.