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IN THE COURT OF APPEALS OF IOWA No. 2-233 / 11-1146 Filed June 13, 2012

VERNON STONE, Plaintiff-Appellee, vs. KENNETH STONE, Defendant-Appellant, and LEANNE LOVESTAD and KENNETH STONE, VERNON STONE and LEANNE LOVESTAD As Co-Executors of the Estate of Verna Stone, Defendants. ________________________________________________________________

Appeal from the Iowa District Court for Buena Vista County, Don E. Courtney, Judge.

Kenneth Stone appeals a district court ruling concluding that he waived his right of first refusal to purchase property owned by his brother and sister. AFFIRMED.

Willis J. Hamilton of Hamilton Law Firm, P.C., Storm Lake, for appellant. Andrew J. Smith of Mack, Hansen, Gadd, Armstrong & Brown, P.C., Storm Lake, for appellee.

Heard by Vaitheswaran, P.J., and Doyle and Danilson, JJ.

2 VAITHESWARAN, P.J. Three siblings disagreed on their respective rights to inherited farmland. This appeal arises out of litigation involving one sibling's right of first refusal to purchase the other siblings' land. I. Background Facts and Proceedings Vernon and Kenneth Stone and Leanne Lovestad, n/k/a Leanne Mohr, each inherited a one-third undivided interest in their parents' farm. When they could not agree on how to divide the farm, Vernon filed a partition action seeking a sale of the land and distribution of the sale proceeds. Kenneth answered and affirmatively stated that the siblings signed an agreement providing that he was to receive the southern third and his siblings were to receive the northern twothirds of the property. He sought to have the land partitioned pursuant to the claimed agreement. Following trial, the district court found that there was indeed a written agreement, since lost, the terms of which entitled Kenneth to the southern onethird of the farm. The court further found that, under the agreement, Kenneth could "buy Vernon's and Leanne's interest if he [could] match their best offer." The court ordered the parties to "specifically perform the terms of their contract and partition accordingly." Vernon and Leanne subsequently received a third-party offer to purchase their portion of the farm for $5500 an acre. They notified Kenneth of their

intention to accept the offer and asked him to let them know whether he wished to match it. Kenneth did not respond and the offer expired.

3 Shortly thereafter, Vernon and Leanne received a second third-party offer to purchase their portion of the farmland for $5700 per acre. Again, they

expressed an interest in accepting the offer. They also negotiated an agreement to have the purchaser lease the land to Kenneth and allow him to farm it. On January 24, 2011, Vernon and Leanne's attorney faxed a letter to Kenneth's attorney, stating an offer of $604,200 had been made on their property and the offer required acceptance by noon on January 25, 2011. The terms of the offer were also forwarded to Kenneth. The letter addressed Kenneth's right of first refusal as follows: Pursuant to the Court's Order, Ken arguably has the right to match this offer if he so chooses. While we believe his failure to match the prior offers resulted in the relinquishment of that right, we are giving him another opportunity to match. Thus, if Ken wants to "match" this offer, he should do so in writing by noon tomorrow with the appropriate down payment. Please advise us as [soon as] possible but no later than noon tomorrow whether or not Ken intends to match the terms of the offer. Kenneth did not see the letter until the following morning, January 25, 2011, at approximately 9:30 a.m. His attorney faxed Vernon and Leanne's attorney a request for an extension until January 28, 2011, at 5:00 p.m. On January 26, 2011, Kenneth received the following response: "The best offer we have

required acceptance by yesterday at noon and Ken failed to `match' it. The Order does not give him the additional time you have requested." Vernon and Leanne's attorney sent a follow-up letter dated January 31, 2011, asking, "Can I assume that since we heard nothing further last Friday from Ken Stone as to his exercising his alleged right to submit a matching offer that the issue is now moot and that we can go about our business of executing

4 deeds?" Kenneth's attorney responded that Kenneth was "willing to sign the Court Officer Deeds, as the Co-Executor of the estate, so long as the Court Officer Deed preserves Ken's leasehold rights in the North 2/3 of the farm for the 2011 crop year." Kenneth also requested a survey of the property. Meanwhile, Vernon and Leanne prepared to close on the transaction. As part of that process, the buyer's attorney asked for Kenneth's signature on a quitclaim deed to ensure clear title to the property. Kenneth's attorney

responded with concerns that Kenneth's signature might jeopardize an agreement to rent the land or might be construed as a waiver of Kenneth's right of first refusal if the proposed sale was not finalized. On March 22, 2011, Vernon and Leanne 's attorney informed Kenneth's attorney that "the waiver of first refusal applies to this purchase. There will be no subsequent purchases. However, if this one falls through, which it will not, we are willing to re-extend his first refusal right." When the attorney did not receive a response, he sent a follow-up e-mail, dated March 29, 2011, asking where Kenneth stood with respect to signing the quitclaim deed. The attorney noted that we have addressed Ken's lease issue, we have addressed his right of first refusal, the survey, and we have addressed giving him clear title to his portion. Thus, Ken Stone has no basis to refuse to sign the deed and help us clean up the title issues and get our sale closed. On April 7, 2011, ten weeks after Vernon and Leanne's attorney first informed Kenneth about the second third-party offer, Kenneth expressed a willingness to match that offer, subject to confirmation of the terms. Vernon and Leanne did not respond.

5 A month later, Vernon moved to enforce the original partition judgment and have Kenneth held in contempt. He sought a determination that Kenneth waived or failed to exercise his right of first refusal and an order compelling Kenneth to execute a quitclaim deed to the northern two-thirds of the property. After a hearing, the court found that Kenneth had not exercised his right of first refusal in a timely manner and he could not interfere with the sale of Vernon and Leanne's land. The court alternately concluded that Kenneth waived his right of first refusal. Kenneth appeals. He asserts that our review is on error. Vernon does not dispute this standard of review. Accordingly, we will proceed with a review for errors of law. See Iowa R. App. P. 6.907. II. Analysis "A right of first refusal is a conditional option which is dependent upon the decision to sell the property by its owner." 17 C.J.S. Contracts

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