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IN THE COURT OF APPEALS OF MARYLAND

No. 137 September Term, 2002 _________________________________________

PARK STATION LIMITED PARTNERSHIP, LLLP

v.

JAMES F. BOSSE, et ux.

__________________________________________

Bell, C.J. Eldridge Raker Wilner Cathell Harrell Battaglia, JJ. __________________________________________

Opinion by Eldridge, J. _________________________________________

Filed: November 13, 2003

This declaratory judgment action presents two questions concerning a right of first refusal in a contract which, inter alia , granted reciprocal easemen ts in two adjoining tracts of land. The first issue is whether a gift of property to a charitable foundation constitutes a "sale" within the meaning of the right of first refusal because the donors will receive a tax benefit from the gift. The second issue is whether the right of first refusal provision in the contract violated the Rule Against Perpetuities. The Circuit Court for Anne Arundel County (North, J.) declared that the gift was not a "sale" within the purview of the right of first refusal and that the right of first refusal provision did not violate the Rule Against Perpetuities. W e agree with the Circuit Court and shall affirm. I. James and Lois Bosse own, in fee simple, a 2.53 acre rectangular parcel of land in the Severna Park area of Anne Arundel Cou nty. The Bosses' parcel is contiguous to the Ritchie Highway and is improved by retail establishments. Park Station Limited Partnership, LLLP, which is the successor to Crow-Park Station Limited Partnership,1 owns, in fee simple, a 20.97 acre parcel of land which surrounds and abuts the Bosse tract on three sides. The Park Station tract is improved by a large shopping center. Hereafter, both Park Station Limited Partnership, LLLP, and Crow-Park Station Limited Partnership, will be referred to simply as "Park Station" without distinguishing between them.
1

-2In 1986, the Bosses and Park Station entered into a contract whereby each of the parties granted to the other non-exclusive "reciprocal easements" in the roads, driveways, parking lots, and pedestrian wal kwa ys of both tracts, agreed not to erect fences or other barriers along the common boundary lines that would hinder vehicular or pedestrian traffic, agreed upon numbers and locations of parking spaces, agreed upon conditions and "restrictions" for future construction of improvements, agreed upon common use of loading areas and placement of trash dumpsters, agreed to cooperate with regard to utilities, and agreed upon certain "use restrictio ns." The right of first refusal provision was contained in the 12th paragraph of the 1986 contract and stated as follows:

"12. Right of First Refusal. If, at any time after the date of this Agreem ent, BOSSE shall desire to sell the BOSSE TRACT or any part thereof, then BOSSE shall give PARK STATION written notice of the desire to sell and the price and terms of sale. PARK STATION shall have thirty (30) days to either accept or reject the offer in writing. In the event PARK STATION fails to accept the offer within said thirty (30) day period, then BOSSE shall be free to sell the BOSSE TRACT or any part thereof to others at a price and upon terms not less favorable to BOSSE than those contained in the written notice to PARK STATION for a period of six (6) months. If such sale is not so consummated, the terms of this Paragraph 12, again, shall be applicable to BOSSE. In the event PARK STATION fails to accept the offer, PARK STATION agrees to execute and deliver to BOSSE, upon request, a certificate setting forth the fact that PARK STATION has not accepted the offer and that BOSSE is free to sell the property to others at the price and upon the terms set forth in the written offer."

In early 2001, the Bosses created a religious foundation, named the Jehovah-

-3Jireh Foundation, Inc. According to the Bosses, the purpose of the Foundation was to provide monetary grants to small churches. The Bosses desired to transfer the Bosse tract to the Foundation, as a gift, in order to provide funding for the Foundation. By letter dated November 15, 2001, the Internal Revenue Service determined that the Foundation was a tax exempt entity and that "Donors may deduct contributions to" the Foundation. In a July 2001 letter, the Bosses' attorney notified Park Station that the Bosses intended "to transfer the Bosse Tract without consideration and as a gift to JehovahJireh Foundation, Inc." The letter went on to express the opinion that the right of first refusal in the 1986 contract "applies to a `sale' and does not apply to a gift." Park Station's attorney replied by letter that the "proposed transfer by Mr. & Mrs. Bosse to Jehovah-Jireh Foundation, Inc., constitutes a `sale' . . . under Section 12 of the Agreement . . . ." The letter explained this position by stating that "it can be inferred that Mr. and Mrs. Bosse expect to receive a tax deduction by virtue of the transfer to the Foundation. Thus, Mr. and Mrs. Bosse would indeed be receiving consideration by virtue of the transfe r." The letter from Park Station's attorney

concluded by saying "that my client does indeed intend . . . to acquire the Bosse Tract for the same amount being paid by Jehovah-Jireh Foun dation." The letter did not explain what "the same amount being paid by" the Foundation meant. After further correspondence failed to produce an agreement, the Bosses filed in the Circuit Court for Anne Arundel County a complaint for a declaratory judgment

-4declaring, inter alia , that the proposed gift of the tract to the Foundation is not covered by paragraph 12 of the 1986 contract and that paragraph 12 "is void and unenfor ceable in that it violates the Rule Against Perpet uities." Park Station filed a countercla im for a declaratory judgment stating, inter alia , that the proposed transfer of the Bosse tract to the Foundation "constitutes a `sale' within the purview of the Right of First Refusal" and that "the provisions of the Right of First Refusal do not violate the Rule Against Perpet uities." Thereafter, the Bosses filed a motion for summary judgment and Park Station filed a cross-motion for summary judgmen t. The motions were based on affidavits and other docume nts which showed that there were no disputes over material facts. Following a hearing, the Circuit Court filed a written opinion and a separate written order declaring that the proposed

"gift of the Bosse Tract to the charitable foundation would not constitute a `sale' within the purview of the right of first refusal contained in paragraph 12 of the Agreem ent, and that the purported right of first refusal would not apply to such a donative transfer of the Bosse Tract . . . ."

The Circuit Court also held that the right of first refusal did not violate the Rule Against Perpetuities, stating:

"`A contract should be interpreted if feasib le to avoid the conclusion that it violates the Rule Against Perpetuities . . . under the doctrine that a construction should be favored which gives effect to intention rather than one which defeats it.' Stewart v. Tuli , 82 Md. App. 726, 735-736 (1990) . . . .

-5"The Rule is not violated by the terms of the Right of First Refusal in paragraph 12. The contract states that the term Bosse refers to James F. Bosse and Lois F. Bosse. Paragraph 12 states `[i]f, at any time after the date of this Agreem ent, Bosse shall desire to sell . . . .' Although the words `[i]f at any time' indicate at any time in the present or future, the words `Bosse shall desire to sell' require Plaintiffs to desire to sell. It goes without saying, that Plaintiffs cannot desire to sell their property when they are dead. Therefore, they must formulate the desire to sell within their lifetimes. "Legal title is vested in Plaintiffs unless they sell or die.1 In Ferrero [ Construction Co. v. Dennis Rourke Corp. , 311 Md. 560, 536 A.2d 1137 (1988)], the contract was between two corporations with perpetual existences. In this case, we have two lives in being . . . . The law requires the Court to interpret this contract, if feasible, to avoid the conclusion that the Rule has been violated. *** "Although paragraphs 6 and 7 refer to `respective successors or assigns,' paragraph 12 does not. Also, paragraph 6 refers only to rights to enforce the contract, not to a desire to sell. Paragraph 7 refers to amendments to the contract being acknowledged by the parties or their respective successors or assigns. Only Plaintiffs can formulate a desire to sell."
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Park State appealed and the Bosses cross-appealed to the Court of Special Appeals. Prior to any proceedings in the Court of Special Appeals, this Court issued a writ of certiorari. Park Station v. Bosse , 374 Md. 81, 821 A.2d 369 (2003). II. Park Station reiterates its argument below that, with "the Bosses receiving valuable consideration in the form of [a] tax benef it," the proposed "conveyance to the Foundation . . . is a sale within the confines of the Right of First Refu sal." (Appellant's brief at 9). Park Station insists that a transfer of property is a "sale," rather than a

-6"gift," whenever a donor "will receive recompense from the con veya nce of the property . . . in the form of tax benefits which are of obvious value." (Appellant's reply brief at 6). Park Station cites no auth ority, from Maryland or elsewhere, in support of this proposition. This Court has both defined the word "sale" and pointed out that it is to be given its common meaning as used by ordinary persons in every day life. Thus, in Eastern Shore Trust Co. v. Lockerman , 148 Md. 628, 636, 129 A. 915, 918 (1925), Judge Offutt for the Court stated:

"To sell means ordinarily to transfer to another for a valuable consideration the title or the right to possess prop erty. Certainly few words are more commo nly used in commercial transactions than `buy' and `sell,' and it has not been supposed that they amounted to any more than a simple description of one of the commonest incidents of every day life, and if Lockerman, as he says he did, transferred the title to his pears to the brokerage com pan y, for a stated price, and received a part of that price, the transaction was a sale, and there is no apparent reason why he should not have so described it."

A similar point was made by the Supreme Court of the United States in Commissioner of Internal Revenue v. Brown, 380 U.S. 563, 570-571, 85 S.Ct. 1162, 1166, 14 L.Ed.2d 75, 82 (1965):

"A `sale,' however, is a common event in the non-tax world; and since it is used in the Code without limiting definition and without legislative history indicating a contrary result, its common and ordinary meaning should at least be persuasive of its meaning as used in the Internal Revenue Code. `Genera lly speaking, the language in the Revenue Act, just as in any statute, is to be given

-7its ordinary meaning, and the words "sale" and "exchange" are not to be read any differe ntly.' *** "`A sale, in the ordinary sense of the word, is a transfer of property for a fixed price in money or its equiva lent,' Iowa v. McFarland, 110 U.S. 471, 478[, 4 S.Ct. 210, 214, 28 L.Ed. 198]; it is a contract `to pass rights of property for mon ey,

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