ALFRED ADEL and WENTWORTH MANAGEMENT, LLC, Plaintiffs-Respondents,
NFPS, INC., Defendant, and MICHAEL GALESI, Defendant-Appellant.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued May 21, 2013
On appeal from the Superior Court of New Jersey, Chancery Division, Passaic County, Docket No. C-108-10.
John J. Segreto argued the cause for appellant (Segreto, Segreto & Segreto, attorneys; Mr. Segreto, on the brief).
Abe Rappaport argued the cause for respondents (Law Offices of Abe Rappaport, attorneys; Mr. Rappaport, on the brief).
Before Judges Fisher, Alvarez and St. John.
This appeal presents an interesting question about the duration of a right of first refusal. The issue may be simply described in the following manner. A obtained a right of first refusal from B, the owner of certain real property. Many years later, B received an offer to purchase the property from C; B advised A, who decided not to exercise his right of first refusal. As a result, B conveyed the property to C. A few years later, C offered to sell the property to D. The question before us is whether A is entitled to preempt D's purchase and compel the sale of the property to him on the same terms and conditions posed by D. We affirm the summary judgment in favor of D because the contract between A and B did not clearly and unambiguously declare that A's right of first refusal would remain viable once B sold the property to C.
In this case, there is no dispute that from 1960 to 1978, the Maltese and Galesi families jointly engaged in the business of acquiring and developing real property. Among their investments was an office park on Galesi Drive in Wayne. When the families ended their relationship in 1978, they divided this office park. In effectuating this distribution of their assets, the Maltese family came to own 40 Galesi Drive (the property), as a result of a conveyance by Passaic County Brick Yard, Inc. and Rahdine Realty Co. (the Grantees) to the Estate of Anthony Maltese, Sr., Anthony Maltese, Jr., and John Redling (the Grantors). The deed transferring title stated it was subject "to the terms of a certain Right of First Refusal Agreement." An agreement then executed declared that "[s]hould the Grantors, at any time hereafter, receive a bona fide offer from a third party to purchase [the property] and such offer is acceptable to the Grantors, then and in such event the Grantors shall give written notice of such offer to the Grantees, " and "[t]he Grantees shall have thirty (30) days from and after the receipt of said notice in which to elect to purchase the parcel . . ., which is . . . subject of said notice, for the same consideration and upon the same terms and conditions . . . of [such offer]."
In 2005, the Grantors were desirous of selling the property to a third party. Notice of the terms of the offer to purchase was given to the Grantees, who chose not to exercise their right of first refusal. In declining, the Grantees asserted that the Grantors were thereafter "required to provide a new notice to us in the event the matter does not close and a new offer is received from another party." The transaction to the third party occurred, and the property was transferred to 40 Galesi LLC. The transferring deed did not state that it was subject to a right to first refusal.
In connection with the purchase, 40 Galesi LLC executed a mortgage in favor of Wachovia Bank. 40 Galesi LLC later defaulted, and Wachovia commenced a foreclosure action. Wachovia was the successful bidder at a sheriff's sale and thereafter assigned its interest in the property to NFPS, Inc., its wholly-owned subsidiary. The sheriff transferred title to NFPS on December 7, 2009.
In July 2010, NFPS entered into an agreement to sell the property to plaintiff Alfred Adel, who later assigned his contractual rights to plaintiff Wentworth Management, LLC for $850, 000. Plaintiffs' attorney raised the 1978 right of first refusal as a potential cloud on title, causing NFPS to present the issue to defendant Michael Galesi (Galesi), who, ...