Narrative Opinion Summary
In this case, CT Cimarron LLC contested a district court's reversal of a bankruptcy order that upheld its right of first refusal on a California property as per a lease agreement. The lease, initially between CT Cimarron’s predecessor and Richard Wagner, mandated that Wagner could not sell the property without offering CT Cimarron a bona fide opportunity to purchase. Wagner's successor, Northern Wolverine, Inc., transferred the property to a bankruptcy trustee without adhering to this stipulation, thus breaching the lease terms. The court concurred with the bankruptcy court's identification of the breach but disagreed with the remedy, ruling that restoration of the right of first refusal, rather than conferring a fee interest to CT Cimarron, was appropriate. The case was remanded for CT Cimarron to exercise its right as per the lease procedures, and the bankruptcy court was directed to calculate attorneys' fees for CT Cimarron. The disposition is not published and does not establish precedent, in accordance with circuit rules, with each party responsible for its own appeal costs.
Legal Issues Addressed
Attorneys’ Fees and Costssubscribe to see similar legal issues
Application: The court directed the bankruptcy court to calculate attorneys’ fees owed to CT Cimarron, with each party bearing its own appeal costs.
Reasoning: Additionally, the bankruptcy court is instructed to calculate attorneys’ fees due to CT Cimarron, while each party bears its own appeal costs.
Breach of Contractual Lease Termssubscribe to see similar legal issues
Application: The court identified a breach of the lease terms when the property was transferred to a bankruptcy trustee without offering CT Cimarron its right of first refusal.
Reasoning: The court found that this transfer breached the lease terms, as the property was not conveyed to Wagner's children—as Wagner claimed—but to the trustee, who was under no obligation to return it to Wagner’s children.
Non-Precedential Dispositionsubscribe to see similar legal issues
Application: The court's decision is not published and does not set precedent, adhering to specific circuit rules.
Reasoning: The disposition is not for publication and is not precedent-setting except as allowed by 9th Cir. R. 36-3.
Remedy for Breach of Right of First Refusalsubscribe to see similar legal issues
Application: The court determined that the correct remedy for breaching a right of first refusal was to restore that right, rather than granting a fee interest in the property.
Reasoning: The appropriate remedy for breach of a right of first refusal is restoration of that right, not outright title transfer.
Right of First Refusal under California Lawsubscribe to see similar legal issues
Application: The court assessed the enforceability of a right of first refusal within a lease agreement, concluding that the transfer of property without honoring this right constituted a breach.
Reasoning: The key issue is the enforceability of this right under California law, as detailed in a ground lease between CT Cimarron’s predecessor and Richard Wagner.