Background
Crocker Park, L.L.C. and related entities sued the City of Westlake over obligations tied to Market Square, a parcel within the Crocker Park mixed-use development. The recorded declaration governing the development required owners to pay their proportionate shares of common expenses. After Westlake ended an agreement under which Crocker Park Management operated Market Square, the City disputed its responsibility for those expenses. Crocker Park Commercial recorded a lien after the City failed to pay billed common expenses.
Westlake also sought to sell Market Square to E&C Sports Group for $2.6 million. The development agreement gave Crocker Park a right of first refusal to acquire the property “at the same price” offered by an unrelated third party. Crocker Park ultimately offered the same price, but conditioned its offer on a property-tax exemption and eligibility for reimbursement from a development “waterfall.” The trial court granted partial summary judgment for Crocker Park and its affiliates, including on Westlake’s counterclaims for slander of title and abuse of process, and declared that Crocker Park had not waived its right of first refusal.
The Court’s Holding
The Eighth District upheld the summary-judgment schedule and rejected Westlake’s claim that it lacked discovery. The motions were filed after the pleadings closed, and Westlake did not seek additional discovery under Civ.R. 56(F). The court also affirmed judgment against Westlake on slander of title and abuse of process. Westlake did not establish malice or recklessness concerning the lien, which remained supported by a claim for unpaid interest, or damages and an improper use of process arising from the lawsuit or lien.
The court reversed the declaration insofar as it concerned E&C’s offer. Although the right of first refusal was a price-only provision, Crocker Park’s added tax and reimbursement conditions made its purported acceptance a counteroffer rather than a valid exercise of the right. Crocker Park therefore waived its right as to E&C’s offer. But the agreement created a continuing right of first refusal for future third-party offers, so Crocker Park did not waive that right prospectively.
Key Takeaways
- A party needing discovery to oppose summary judgment must seek relief under Civ.R. 56(F).
- A right of first refusal limited to matching price may still be lost when the holder adds material conditions to its acceptance.
- Failure to exercise a continuing right of first refusal on one offer does not necessarily extinguish the right as to future offers.
Why It Matters
The decision distinguishes between a right holder’s ability to match the stated price and its ability to impose new deal terms. Even where a right of first refusal is expressly price-only, conditions appended to the purported exercise can convert it into a counteroffer and forfeit the right for that transaction.
It also underscores that a continuing first-refusal clause should be read according to its text: waiver of one failed sale opportunity does not eliminate rights that the agreement grants for later offers.