In Re Virgil F Hoppert Estate

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to

revision until final publication in the Michigan Appeals Reports.

STATE OF MICHIGAN

COURT OF APPEALS

In re ESTATE OF VIRGIL F. HOPPERT.

GLEN HOPPERT, FOR PUBLICATION

June 29, 2023

Petitioner-Appellee, 9:00 a.m.

v No. 362694

Monroe Probate Court

DALE A HOPPERT, Individually, and as Personal LC No. 2021-000221-DE

Representative of the ESTATE OF VIRGIL F.

HOPPERT,

Respondent-Appellant.

Before: SWARTZLE, P.J., and CAVANAGH and LETICA, JJ.

PER CURIAM.

Respondent, Dale A. Hoppert, individually and as personal representative of the Estate of

Virgil F. Hoppert, appeals by right an order granting summary disposition under MCR 2.116(C)(9)

(failure to state a valid defense to the claim) to petitioner, Glen Hoppert. The trial court granted

the latter’s petition to return property to a previous estate and allow him a fresh set of days to

exercise his purchase option, which otherwise would have expired. On appeal, respondent

challenges both the legality of the restriction agreement and, alternatively, petitioner’s

performance in meeting the agreement’s purchase-option deadline. Because petitioner did not

meet the deadline and should not be granted additional time to do so, we reverse and remand.

I. BACKGROUND

This case arises out of a restraint on alienation that provided petitioner with an option to

buy certain real property upon the death of another holding an interest in that property. Respondent

had been deeded the property before petitioner exercised this purchase option.

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A. THE RESTRICTION AGREEMENT

Norman and Edith Barkenquast, grandparents of the parties, owned and farmed the two

parcels of real estate at issue in this case. They had two daughters, Kathleen Hoppert and Linda

McKinney. On January 3, 1989, the Barkenquasts executed a quitclaim deed, granting their

daughters the property as joint tenants while retaining life estates for themselves. Petitioner was

the eldest son of Kathleen, while respondent was her second son. The Barkenquasts granted

petitioner the option to purchase the fee title interest “in all of the property within nine months of

the death of his last surviving maternal grandparent, either Norman or Edith.”

On June 8, 2001, petitioner exchanged this option for a new agreement with Kathleen and

Linda, purchasing a one-third interest in the property from Kathleen and Linda for $80,000. He

obtained farming rights over all of the property.

A “Real Estate Restriction Agreement” was incorporated into the purchase agreement. The

agreement stated that Kathleen, Linda, and petitioner were “the ‘Parties’ ” and “equal one-third

(1/3) tenants in common.” The agreement uses the term “Party” for Kathleen, Linda, or petitioner,

and “non-Party” for any other interest holder that might arise. The real estate involved was

described as two parcels in Ida Township that together contained about 86 acres. The restriction

agreement stated that it would “restrict and restrain” transfers “except as otherwise specifically

provided and allowed by this Agreement.” The agreement further stated that it was establishing

“rights, restrictions and obligations . . . in the event of a Party’s voluntary wish to sell, involuntary

transfer, or death.” The agreement additionally stated that the Parties may not “transfer, assign,

encumber, pledge, sell, devise, give or otherwise dispose of part or all of their interest in and to

the Real Estate interest . . . except pursuant to the terms of this Agreement,” and that “[a]ny such

Disposition contrary to the terms of this Agreement shall be null and void and have no effect

whatsoever.”

The restriction agreement established that, upon the death of any Party, the surviving

Parties would have the option to purchase the deceased Party’s interest. A timeline for exercising

this option was set forth as follows:

If the surviving Parties elect to exercise their option to purchase the interest of the

deceased Party, they shall serve notice in writing of such election upon the deceased

Party’s personal representative and/or trustee within sixty (60) days after the death

of the Party. If all of the surviving Parties, as a group, do not elect to purchase the

interest of the deceased Party, then the surviving Party who wishes to purchase all

of the deceased Party’s interest in the Real Estate, shall serve notice in writing of

such election upon the personal representative of the deceased Party within thirty

(30) days after the surviving parties, as a group, decline to exercise their option to

purchase their “pro-rata” share of the deceased Party’s Real Estate interest. If none

of the surviving Parties elect to purchase the interest of the deceased Party, then the

deceased Party’s personal representative and/or trustee may dispose of or transfer

the deceased Party’s interest in the Real Estate to a non-Party consistent with the

terms and provisions of the deceased Party’s estate planning directives or may sell

such interest to a non-Party pursuant to a bonafide offer, however, pursuant to and

consistent with the terms and procedures of paragraph 3 below.

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Paragraph 3 then describes the process for a sale of a Party’s interest. First, a “bonafide

offer” must be established, and written notice of it “shall immediately” be provided to the other

Parties. Upon receipt of that notice, the other Parties exclusively had 30 days to elect to purchase

the selling Party’s interest themselves. “If the other Parties fail to timely exercise their option,

then the selling Party may sell his or her interest in the Real Estate to the proposed purchaser . . .

.” Paragraph 4 describes the process for involuntary transfers. Paragraph 5 describes the process

for voluntary transfers to another original Party.

The restriction agreement also provides for persons who are not original parties who later

acquire interests in the property. That person “and his or her spouse, if any” are bound by the

agreement as if that person were an original Party, except that he or she “shall not be entitled to

notice or a purchase option under any other provisions in this Agreement, other than as a third

Party purchaser.” The agreement provides that, unless all Parties agree to a different price, then

two times the state equalized value is to be used as the fair market value of the property, with the

buyer paying the appropriate percentage of that. Payment terms are set as 10% due in cash at

closing, with 20 equal quarterly payments due thereafter with an 8% interest rate.

The restriction agreement, in Paragraph 9, states that if an “interest of a Selling Party is not

purchased or disposed of pursuant to the foregoing options, the Real Estate interest shall be and

remain subject to all of the terms, provisions and restrictions of this Agreement.” The agreement,

in Paragraph 12, further provides that it was to terminate when there is only one remaining Party

holding an interest in the property, or upon unanimous agreement of the Parties still holding an

interest. The agreement, in Paragraph 15, states that it is “binding upon all Parties hereto, their

respective spouses, successors, assigns, heirs, personal representatives and legal representative.”

Paragraph 18, titled “Acceptance of Terms by Spouses,” states that the spouses of the

Parties have read the agreement, waived and relinquished all rights of election and dower in the

property, agreed to join in executing any amendments “necessary to accomplish the purposes of

this Agreement,” and permit “their Party spouses to sell, transfer, dispose, and otherwise restrict

their undivided interest in the Real Estate during their life time and upon their deaths in accordance

with the terms of this Agreement.” The agreement set forth labeled places for the Parties and their

spouses’ signatures, and the only line unsigned was for Virgil, who was the husband of Kathleen.

All signatures are dated July 9, 2001.

In exchange for being allowed this purchase from Kathleen Hoppert and Linda McKinney,

on July 9, 2001, petitioner released his option to purchase granted by the Barkenquasts on January

3, 1989. Martin Kamprath was the attorney who prepared all of these documents related to the

exchange.

B. TRANSFERS AND DEATHS

Petitioner claimed that in 2016 Kathleen’s “capacity was suspect.” Petitioner’s and

respondent’s sister, Kay Hehl, described the ways that Kathleen was still competent in 2016, and

how petitioner had been estranged from the rest of the family, which led to Kathleen changing her

wishes about the property. On December 21, 2016, Kathleen executed a quitclaim deed

transferring her interest in the property from just herself to herself and her husband, Virgil.

Attorney Kamprath prepared this deed. According to petitioner, Virgil “took Kathleen from the

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hospital to” Kamprath. Hehl disputed that, stating that Kathleen’s hospitalization was “two

months” after the deed was prepared. The trial court noted that this deed was contrary to the terms

of the restriction agreement. When later “confronted by Linda about the legality of the quit-claim

deed that had been prepared by him,” Kamprath allegedly described the situation as a “nightmare.”

Kathleen died on February 26, 2017. Petitioner did not offer to buy her interest.

On June 15, 2018, Virgil executed a quitclaim deed that gave his interest in the property to

respondent for no consideration. This deed was prepared by attorney Melissa Matiash. Petitioner

stated that, after the latter conveyance, Virgil told him that respondent “was his personal

representative and everything would be taken care of regarding the 1/3 interest going to petitioner.”

Petitioner further stated that Virgil did not inform him or Linda of the deed. After speaking with

Virgil about the property, petitioner believed “at the worst” that he could exercise his purchase

option when Virgil died.

Virgil also signed his will on June 15, 2018. The will lists five offspring: petitioner, Karen

Appling, respondent, Kay M. Hehl, and Lori Crimmins. Article II of the will sets forth specific

bequests of real estate, and creates a scheme that differs depending on which property his children

own at his death, with certain monetary offsets to be paid to certain children if property is given to

another of the five children. Respondent’s bequests depend on respondent still owning “the ten

(10) acres West of and adjacent to the West line of my homestead farm as he does at the time of

my execution of this Will.” Karen, respondent, Kay, and Lori are all involved in this article.

Petitioner is not involved in any of the specific bequests. The residuary provision gives equal

shares to each child. Respondent is named as the first candidate for personal representative.

Virgil died on January 31, 2021. Petitioner stated that he “discovered [respondent’s]

interest when he checked the taxes in February, 2021, and discovered that [respondent’s] name

was on the tax bill.” The two 2020 property tax bills were due on February 16, 2021, and both

appear to have been paid on time. One lists petitioner’s name, a state equalized value of $195,500,

and a bill for $1,237.57. The other lists respondent’s name, a state equalized value of $91,900,

and a bill for $317.90. Kay Hehl stated that petitioner told her “he just discovered at the township

office that [respondent’s] name was on the deed” approximately two weeks after Virgil’s death.

She stated that he then said, “ ‘I messed up.’ ”

Petitioner reported that Linda called Kamprath on March 29, 2021 to discuss the restriction

agreement and quitclaim deeds. According to petitioner, Kamprath “said the whole situation was

a nightmare and concluded that there really wasn’t anything that [Linda] could do about it and ‘we

would just have to live with it.’ ” On April 13, 2021, respondent filed a petition for informal

probate. Respondent was appointed personal representative and then published the notice to

creditors.

C. PETITION FOR SALE

On May 21, 2021, petitioner filed his petition to compel the sale of the subject property to

him. He stated that Linda had given 20% of her interest to him, and had “told him she would leave

the balance to him in her will.” Petitioner characterized the deed from Virgil to respondent as a

cloud on title, and asked the court to declare the property interest an asset of Virgil’s estate.

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Petitioner further asked to exercise his option to buy the property interest for 1/3 of two times the

state equalized value, currently $191,600.

Respondent filed a response, arguing that the restriction agreement was an illegal restraint

on alienation insofar as it “has an unlimited duration.” Respondent alternatively argued that

petitioner’s failure to exercise his option within 60 days of Kathleen’s death waived any rights he

might have had, and that petitioner had waived his rights by not exercising his option within 60

days of Virgil’s death.

On February 28, 2022, petitioner filed a motion for summary disposition under MCL

2.116(C)(9), arguing that respondent failed to state a valid defense to his claim. The motion asked

the court to: abrogate the deed from Virgil to respondent, find that title vested in Virgil’s estate,

and require sale of the property to petitioner. Respondent opposed the motion. On April 13, 2022,

an affidavit from Kay Hehl was filed with the trial court, explaining that Hehl would be unable to

attend the upcoming hearing because of work, and was submitting the affidavit instead.

A hearing was held on April 19, 2022. In addition to the instant parties’ respective personal

counsel, an attorney for Virgil’s estate appeared, representing respondent in the latter’s role as

personal representative. Petitioner’s counsel argued that the Barkenquasts had “made it clear that

they wanted to reward [petitioner] for having gone into the family business, to have run this farm

for the . . . 40 years that he ran this farm,” and that petitioner had “worked his whole life for this

property.” Petitioner’s counsel stated that petitioner was not attempting to cancel the transfer from

Kathleen to herself and Virgil, but was trying to void the transfer from Virgil to respondent.

Describing petitioner’s actions upon Kathleen’s death with regard to the transfer to Virgil,

counsel stated, “he made the choice to wait it out, he was persuaded by Kamprath saying that he

just had to live with it, which probably wasn’t good advice, but because [the restriction agreement]

was so well drafted it didn’t matter.” Respondent’s counsel stated that there was no evidence

presented “that Marty Kamprath ever said anything, that [petitioner] knew or didn’t know

anything,” or about what Mr. Barkenquast or Kathleen “had wanted 20 years ago.” Respondent’s

counsel asserted that notice of petitioner’s decision to exercise his option was received

approximately 100 days after Virgil’s death, past the number of days allowed for exercising the

option. Petitioner’s counsel acknowledged that the notice was received past the number of days

allowed for exercising the option, adding, “I’m not sure of the exact number of days.”

Respondent’s counsel stated that petitioner’s relationship with Kathleen and Virgil had

changed since the restriction agreement was executed, which was why they updated their estate

plan. Counsel stated that the affidavit from the parties’ sister would explain the change in the

estate plan.

Petitioner’s counsel argued that a motion under MCR 2.116(C)(9) was to be based only on

the pleadings, and so the affidavit should not be considered. Petitioner’s counsel further argued

that, because respondent held the property interest, the option time limit would not begin to run

until it was returned to Virgil’s estate. He also asserted that respondent would not have allowed

the sale, which would have made petitioner’s giving notice to him “superfluous.” The trial court

stated that it would not review the affidavit of the parties’ sister because the motion was brought

under MCR 2.116(C)(9).

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The attorney for Virgil’s estate argued that petitioner had been given several chances to

exercise an option to buy the property, and had failed to timely use any of them. The trial court

noted the equitable concern that petitioner had invested in buildings and equipment with the

intention of continuing to farm the property. The attorney for Virgil’s estate stated that, when the

restriction agreement “was originally signed, it was well known that Virgil was not in agreement

with that.” Petitioner’s counsel confirmed that he was not arguing against the transfer from

Kathleen to Virgil.

D. THE TRIAL COURT ORDER

On August 2, 2022, the trial court granted petitioner’s motion for summary disposition, in

part. First, the court considered respondent’s defense that the restriction agreement constituted an

illegal restraint on alienation. The court noted that petitioner had obtained his option in a

reasonable, bargained-for exchange—which was legal. He gave up an option to purchase all of

the property, and became a tenant in common with a future opportunity to obtain all of the property.

Essentially the parties entered into an option or right of first refusal contract. The court noted that

this case did not involve a land contract or “a vendor who wanted to protect against missed

payments,” and observed that petitioner had “reasonably relied upon the agreements, farming the

property and making significant improvements.” The trial court noted that although Virgil had not

signed the restriction agreement, that did not make the restriction agreement unreasonable; the

property interest had been gifted to only Kathleen by her parents. Moreover, the court held, the

transfer from Kathleen to Virgil was void as in contravention to the restriction agreement entered

into between petitioner, Kathleen, and Linda. Thus, the trial court concluded that respondent’s

defense—that the restriction agreement constituted an illegal restraint on alienation—was without

merit.

Second, the trial court considered respondent’s defense that petitioner missed the deadline

to purchase the subject property thereby waiving any such right to purchase. The trial court

acknowledged that petitioner had not exercised his option to purchase after Kathleen’s death, and

excused this on the ground that “by the time Kathleen had died, she had already clouded title to

the property by recording the void quit-claim deed, which transferred her interest to herself and

her husband, Victor [sic], as joint tenants with rights of survivorship.” The trial court also noted

that petitioner retained his option as to non-party interest holders, such as Virgil, as set forth in

Paragraph 2 of the agreement.

Third, the trial court rejected respondent’s defense that the agreement did not give an option

after the death of a non-party interest holder. The court noted that the agreement contained “no

prohibition of the parties purchasing a share from a non-party.” To the contrary, Paragraph 6

referred to a non-party’s obligations if he wished to sell. In any case, the court held, Kathleen

violated the restriction agreement by deeding the property to her husband Virgil; therefore, that

transfer was void. Accordingly, Virgil owned no property as a consequence of the deed and had

no legitimate property interest to deed to respondent.

The trial court noted that this case turned on contract law and concluded that “the original

parties entered into a legitimate contract affecting their interests in real estate, and the court must

uphold the same.” It then offered two alternative courses of action. First, Kathleen’s estate could

be reopened with the subject property interest as part of it, with petitioner given 60 days after the

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appointment of a personal representative to exercise his purchase option as set forth in the

restriction agreement. Alternatively, the property interest could be treated as vested in Virgil’s

estate (as if the Kathleen conveyance had been valid) and petitioner would be given 60 days to

exercise his purchase option. Accordingly, petitioner’s motion for summary disposition was

granted in part.

This appeal followed. Respondent argues that the trial court erred in finding that the

restriction agreement did not constitute an illegal restraint on alienation when it prohibited the

parties from selling or otherwise alienating their interest in the property for at least 30 days and up

to 90 days. Further, respondent argues, the trial court erred in allowing petitioner to enforce the

restriction agreement, giving him an opportunity to purchase the property when he failed to follow

the terms of that agreement. The parties agreed to stay the matter, and maintain the status quo use

of the property, pending appeal.

II. ANALYSIS

A. STANDARD OF REVIEW

This Court reviews de novo a trial court’s decision on a motion for summary disposition.

In re Smith Trust, 480 Mich 19, 23-24; 745 NW2d 754 (2008). “When deciding a motion under

MCR 2.116(C)(9), which tests the sufficiency of a defendant’s pleadings, the trial court must

accept as true all well-pleaded allegations and properly grants summary disposition where a

defendant fails to plead a valid defense to a claim.” Slater v Ann Arbor Pub Sch Bd of Ed, 250

Mich App 419, 425; 648 NW2d 205 (2002). Only the pleadings may be considered. MCR

2.116(G)(5). “Pleadings include only complaints, cross-claims, counterclaims, third-party

complaints, answers to any of these, and replies to answers.” Slater, 250 Mich App at 425.

Documents attached to the pleadings are considered part of the pleadings for purposes of MCR

2.116(C)(9). See El-Khalil v Oakwood Healthcare, Inc, 504 Mich 152, 163; 934 NW2d 665

(2019), citing MCR 2.113(C). “Summary disposition under MCR 2.116(C)(9) is proper when the

defendant’s pleadings are so clearly untenable that as a matter of law no factual development could

possibly deny the plaintiff’s right to recovery.” Slater, 250 Mich App at 425-426.

This Court also reviews de novo the proper interpretation of a contract as a question of law.

In re Smith Trust, 480 Mich at 24. “When a court interprets a contract, the entire contract must be

read and construed as a whole.” Smith v Smith, 292 Mich App 699, 702; 823 NW2d 114 (2011).

“All the parts must be harmonized as much as possible, and each word of the contract must be

given effect, if possible.” Id. “If the contractual language is unambiguous, courts must interpret

and enforce the contract as written, because an unambiguous contract reflects the parties’ intent as

a matter of law.” In re Smith Trust, 480 Mich at 24.

B. LEGALITY OF RESTRICTION AGREEMENT

The trial court concluded that the restriction agreement did not constitute an illegal restraint

on alienation. We agree.

MCL 554.44 states, “All grants and devises of lands, made to 2 or more persons, except as

provided in the following section, shall be construed to create estates in common, and not in joint

tenancy, unless expressly declared to be in joint tenancy.” MCL 554.45 states, “The preceding

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section shall not apply to mortgages, nor to devises or grants made in trust, or made to executors,

or to husband and wife.”

“A restraint on alienation of property is defined as an attempt by an otherwise effective

conveyance or contract to cause a later conveyance (1) to be void (disabling restraint), (2) to

impose a contractual liability upon the conveyance for conveying in breach of the agreement not

to convey (promissory restraint), or (3) to terminate all or part of a conveyed property interest

(forfeiture restraint).” LaFond v Rumler, 226 Mich App 447, 451; 574 NW2d 40 (1997).

“Michigan recognizes a strong public policy against restraints on alienation.” Albro v Allen, 434

Mich 271, 281; 454 NW2d 85 (1990). “Michigan follows the common-law rule against

unreasonable restraints on alienation of property.” LaFond, 226 Mich App at 451. As the LaFond

Court also noted:

The Restatement, Property, § 406, p 2406 (1944), specifies that a restraint is

permissible if it is reasonable under the circumstances:

“i. Reasonableness. Even though a restraint on alienation is a forfeiture or

promissory restraint and is qualified so as to permit alienation to some though not

all possible alienees, the restraint must still be found to be reasonable under the

circumstances.” [LaFond, 226 Mich App at 453 n 2.]

Some cases involving fee simple estates passed through a will indicate that restriction

agreements are not permitted at all, sometimes using language which could extend to other

property situations as well. In Mandlebaum v McDonell, 29 Mich 78, 79-81 (1874), the restriction

provision in a will did not allow selling the bequeathed property for 21 years, and after that for as

long as the decedent’s wife still lived. The Supreme Court took a firm stance against restraints on

alienation:

We are entirely satisfied there has never been a time since the statute quia

emptores when a restriction in a conveyance of a vested estate in fee simple, in

possession or remainder, against selling for a particular period of time, was valid

by the common law. And we think it would be unwise and injurious to admit into

the law the principle contended for by the defendants’ counsel, that such restrictions

should be held valid, if imposed only for a reasonable time. It is safe to say that

every estate depending upon such a question would, by the very fact of such a

question existing, lose a large share of its market value. Who can say whether the

time is reasonable, until the question has been settled in the court of last resort; and

upon what standard of certainty can the court decide it? Or, depending as it must

upon all the peculiar facts and circumstances of each particular case, is the question

to be submitted to a jury? The only safe rule of decision is to hold, as I understand

the common law for ages to have been, that a condition or restriction which would

suspend all power of alienation for a single day, is inconsistent with the estate

granted, unreasonable and void. [Id. at 107.]

“If one’s interest in property is absolute, as a fee simple, restriction on his right of alienation

is void as repugnant to the grant. This is because violation of the restriction affects no interest but

his own.” Sloman v Cutler, 258 Mich 372, 374; 242 NW 735 (1932). “Where the grantor retains

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an interest in the property granted, such as reversionary interest to him as lessor, the interest

generally will support the imposing of a restriction on alienation.” Id. at 374-375.

Later cases have still found restraints illegal, without using as strong of language

condemning all restraints. These cases involved joint tenancy or tenancy in common, instead of

singular fee simple owners. In Braun v Klug, 335 Mich 691, 692; 57 NW2d 299 (1953), the

defendants deeded land to the plaintiffs. The deed provided that the land would “ ‘not be sold to

anyone except grantors herein or their heirs, representatives or assigns. It is agreed that this

covenant shall run with the land.’ ” Id. The plaintiffs claimed that this provision was “an

unreasonable restraint upon the power of alienation.” Id. at 694. The Supreme Court agreed,

ruling, “Such condition restricts the number of potential buyers. It is repugnant to the grant and a

restraint on the inherent right of alienation and therefore void.” Id. at 695.

In Smith v Smith, 290 Mich 143, 146; 287 NW 411 (1939), Joseph Smith made a joint

tenancy of a set of apartments with his son, Douglas Smith. The following provision was included

in the deed:

“It is a part of the consideration for which this deed is given that neither of

the parties of the second part hereto shall or can sell, deed, mortgage, or in any way

incumber or dispose of his interest in said premises or any part thereof without the

consent of the other party in writing.” [Id.]

The Supreme Court held that “the restrictive paragraph was repugnant to the grant and a restraint

on the inherent right of alienation and therefore void.” Id. at 157.

The LaFond case involved a land contract sale. LaFond, 226 Mich App at 448-449. When

reviewing land contract restraints on alienation, courts take a “measured approach and have

focused on the reasonableness of the restriction at issue.” Id. at 453. “[N]onassignability

provisions in land contracts exist for the benefit of the vendor to safeguard performance. Under

reasonable circumstances, these restrictions will be enforced solely for that purpose.” Id. at 455.

Assignments can be prevented if they would result in waste, impairment, or loss of security. Id.

at 454. They cannot be prevented if the assignees would continue to provide the benefit under the

contract that the party bargained for. Id. The provision at issue in LaFond “was drafted with one

particular transaction in mind and without anticipation of other contingencies.” Id. at 455.

The provision did “not restrict plaintiff’s right to sell the property, but it does restrict her

right to sell the property at the price she chooses.” Id. at 455-456. An “appraiser may decide that

the property is worth more than a new purchaser is willing to pay, hence disrupting a prospective

sale and in effect creating an unreasonable restraint on alienation.” Id. at 456. In Pellerito v

Weber, 22 Mich App 242, 245; 177 NW2d 236 (1970), this Court had pointed to there being no

“allegations of waste or impairment or loss of security” in support of the Court’s decision that a

clause of the contract was unreasonable in attempting to bring about a forfeiture of the conveyance.

In LaFond, this Court quoted that reasoning in concluding that “the addendum in this case exceeds

the appropriate considerations of ‘waste or impairment or loss of security’ of the vendor’s interest

and the stability of real estate titles and interjects profit as a factor in the alienation of the property.”

LaFond, 226 Mich App at 456-457. This Court found the restraint unreasonable. Id. at 457.

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The case of Lantis v Cook, 342 Mich 347; 69 NW2d 849 (1955), involved an option clause

in a warranty deed that had granted property to a married couple (the grantees) jointly with right

of survivorship. Id. at 349 (SHARPE, J., dissenting). The option clause stated:

“If the [grantees] do not wish at any time to use the property as a home, the

[grantors] shall have the first privilege to purchase the above described property at

any future time at the price stated in this deed, viz., Four Thousand Dollars.” [Id.]

An issue arose when the plaintiffs, the grantors, attempted to exercise the option because the value

of the property rose to $12,000. Id. at 350. The Lantis Court noted the strong anti-restraint

language found in earlier fee simple cases, stating that the “common law rule prohibit[s] direct

restraints on alienation for any period whatsoever, however short.” Id. at 355. However, the Lantis

Court distinguished the option before it holding that “a preemptive option with fixed price is not

void in Michigan.” Id. at 356. The Court quoted 2 Simes, Future Interests, § 462, p 304:

“Practical alienability might, in some instances, be

restrained by such a contract, but its primary purpose is to enable a

particular person to buy, not to prevent any one from selling; and

doubtless the owner could alienate his property subject to the option

if he wished.” [Id. at 357.]

The Lantis Court defined a preemptive option as a “first-right-to-buy option to arise only if the

optionors desire to sell . . . .” Id. The option at issue was found to not even be preemptive because

it was triggered by the more expansive condition of the grantees not wishing to use the property

as a home. Id. at 358. “Such an option, exercisable upon the happening of a condition precedent,

is not regarded as a direct restraint on alienation and is everywhere held valid even though it

specifies a fixed price . . . .” Id. The primary purpose of the option was simply to enable a

particular person to buy the property, not to prevent its sale. Id. at 359. Therefore, the Court held,

the option was not an illegal restraint on alienation. Id. at 357.

“A right of first refusal, or preemptive right, is a conditional option to purchase dependent

on the landowner’s desire to sell.” Randolph v Reisig, 272 Mich App 331, 336; 727 NW2d 388

(2006). “[R]ights of first refusal must contain a definite time for performance. Such agreements

are not void, however, merely because they lack a specific time for performance.” Id. at 336-337.

“Rather, in the absence of a specific time, courts will construe agreements ‘to be for a reasonable

period of time,’ and, thus, such agreements are valid only for a reasonable period.” Id. at 337,

quoting Brauer v Hobbs, 151 Mich App 769, 777; 391 NW2d 482 (1986). “There is a strong

tendency to construe an option of preemption to be limited to the lives of the parties ‘unless there

is clear evidence of a contrary intent.’ ” Randolph, 272 Mich App at 337, quoting Brauer, 151

Mich App at 779 (quotation marks and citations omitted).

In Randolph, property owners belonging to an owners’ association entered an agreement

that included the following:

“D. That any party or parties owning any land covered by this agreement and who

desire to sell their property and to discontinue their summer residence on such

property, before entering into any binding agreement to sell any of said property to

any person or persons not an owner of and summer resident on land covered by this

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agreement, will notify in writing all the then owners of the land covered by this

agreement and directly bordering upon the parcel of land which it is thus desired to

sell, of their intention to sell such property and shall give the parties so notified, or

any of them, the first option to buy the said property for a period of fifteen (15)

days from the date of mailing such notification.” [Randolph, 272 Mich App at 334.]

The agreement set forth

a clear intent that the right of first refusal run with the land and bind all heirs “until

January 1, 1960, at which time such covenants shall be automatically extended for

successive periods of ten (10) years” unless a majority of the then owners agreed

to change the covenants. . . . There is nothing indefinite about the initial term, and

there is nothing indefinite about the successive terms. [Id. at 337-338.]

This Court held that the agreement therefore did not violate the rule against indefinite times of

performance for rights of first refusal. Id. at 338.

In this case, we agree with the trial court’s conclusion that the restriction agreement did

not constitute an illegal restraint on alienation. While our historical case law is not the model of

clarity on the issue, as our Supreme Court and this Court have held—consistent with modern

contract law and freedom-to-contract principles—restraints on the power of alienation are

reviewed for reasonableness. See Braun, 335 Mich at 694; LaFond, 226 Mich App at 451.

Respondent challenges several aspects of the restriction agreement. First, he argues that

the length of time it requires an interest holder to wait before completing a transfer is too

burdensome. This argument is unconvincing. The longest amount of time the agreement allows

a party to exercise an option is 90 days, in the event of the death of a party. There, the surviving

parties would have up to 60 days to decide whether to collectively buy the interest, and if deciding

against collective purchase, each party has an additional 30 days after that decision to decide

whether to buy it individually. Given a prospective buyer’s need to arrange for financing, and

otherwise weigh the decision whether to buy, those timing specifications are not unreasonably

lengthy.

Respondent expresses greater concern about the length of time that the restriction

agreement might stay in effect, or that “the right of first refusal is indefinite.” He characterizes it

as extending into perpetuity, because it does not list a specific number of years it will be in effect.

Yet the agreement does describe a termination date, just not in the form of a set number of years.

The agreement was signed on July 9, 2001, and states that the agreement terminates when there is

only one original party still holding an interest. There were only three original parties: Kathleen,

Linda, and petitioner. The agreement would therefore terminate, at the latest, after two of them

died and their interest in the subject property were distributed from their estates. Kathleen died on

February 26, 2017. The agreement is now set to terminate upon the death of only one of either

Linda or petitioner. While the record does not disclose the ages of Kathleen and Linda at the time

of the agreement, they appear to have been old enough that Kathleen’s death in 2017 was not a

surprise. Setting the termination date to the length of a person’s life is reasonable. See Randolph,

272 Mich App at 337 (indicating that preemption options set to the lives of the parties are

reasonable, and could even be reasonable beyond that if a clear intent to do so was present). This

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agreement also does not have a renewal provision. The length of the agreement is thus not

unreasonable.

Respondent also appears to take issue with the frequency of events that could give rise to

an option for the original parties. The agreement sets forth an option for the original parties every

time a transfer occurs, whether the transferor is an original party or new one. Respondent points

to the multiple events that occurred already and arguably gave petitioner an option: Kathleen’s

transfer to herself and Virgil, Kathleen’s death, Virgil’s transfer to respondent, and Virgil’s death.

It is inaccurate to describe all of those transfers as giving rise to an option. Under the

interpretation of the trial court, the Kathleen and Virgil transfers were invalid and therefore need

not even be considered. The agreement also allows transfers upon only death, sales, involuntary

transfers, and transfers to an original party. Even the Kathleen and Virgil transfers only involved

family members. The four possible option events have not demonstrated an agreement allowing

for overly frequent options, given the 20 years over which they have occurred. By starting with

only three original parties and restricting the ways that the property may be transferred, the

agreement ensured that it would not give rise to constant option-triggering events. The range and

frequency of options were not unreasonable.

Restraints on alienation that have been found to be illegal can be distinguished from this

one. Non-assignability provisions in land contracts that limit the buyer’s assignment rights beyond

what is necessary to protect the benefits for which the seller bargained are not valid. See LaFond,

226 Mich App at 454. That the instant agreement did not involve a land contract seems a

distinction that makes no difference, but not having the option would deprive petitioner of a benefit

he bargained for. Petitioner traded away his previous option, along with $80,000, in order to obtain

his property interest and new option. The LaFond case involved a badly drafted, inflexible

provision that potentially resulted in a price so high that no buyers could be expected to come

forward. LaFond, 226 Mich App at 455-456. To the contrary, the agreement at issue in this case

had a well-thought-out pricing scheme that allowed any bona fide buyer to offer a price worthy of

consideration. The Braun case involved a provision allowing sales to only the grantors and their

heirs, representatives, or assigns. Braun, 335 Mich at 692. To the contrary, the agreement at issue

here allows sales to anyone, merely giving the original parties special options to buy as well. The

deed at issue in Smith did not allow any disposal without the consent of both joint owners. Smith,

290 Mich at 146. The agreement at issue here does not require such consent: when one owner

wishes to dispose of his or her interest, the remaining owners have an opportunity to obtain that

interest, but may not simply prevent disposal in the first instance. Finally, the decision in

Mandlebaum, 29 Mich at 107, turned on a restraint of the “conveyance of a vested estate in fee

simple.” This agreement was bargained for, not merely bequeathed, and relates to a tenancy in

common. A greater degree of latitude in how owners of a property interest might restrict alienation

is logical, compared to a bequeath of a fee simple estate.

In summary, the trial court properly held that the restriction agreement did not constitute

an illegal restraint on alienation; therefore, petitioner’s motion for summary disposition in that

regard was properly granted because respondent’s defense was not valid.

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C. UNTIMELY ENFORCEMENT OF PURCHASE OPTION

The trial court concluded that petitioner was entitled to exercise his purchase option arising

from the restriction agreement. We disagree.

As our Supreme Court long ago explained:

An option is not a contract of purchase; it is simply a contract by which the

owner of the property agrees with another that he shall have a right to buy the

property at a fixed price within a specified time. An option is but an offer, strict

compliance with the terms of which is required; acceptance must be in compliance

with the terms proposed by the option both as to the exact thing offered and within

the time specified; otherwise the right is lost. [Bailey v Grover, 237 Mich 548, 554-

555; 213 NW 137 (1927).]

Mere “substantial compliance with the terms of the option is not sufficient to constitute an

acceptance of the offer.” Beecher v Morse, 286 Mich 513, 516; 282 NW 226 (1938).

In Weinburgh v Saier, 303 Mich 640, 641; 6 NW2d 921 (1942), the issue involved the

reformation of a land contract. The plaintiff had discovered that the property at issue consisted of

“much less than 8 acres,” even though he was paying for 8 acres. Id. at 644. The plaintiff “told

[the] defendant he would settle up on the correct basis, and in turn was told to pay the full amount

stated in the contract, or else the contract would be immediately forfeited.” Id. The trial court had

ruled that “plaintiffs should not be called upon to pay interest after January 1, 1937, as they were

willing to pay the entire amount if proper corrections were made, but defendant refused and

threatened immediate foreclosure.” Id. Our Supreme Court held:

The trial court found that tender, if made, would have been refused, and there is

ample evidence to support this finding. This being so, tender was excused, and the

payment of interest thereafter suspended. “The law does not require a useless

formality. A formal tender is not necessary where a party has shown by act or word

that it would not be accepted, if made.” [Id. at 645, quoting Mahnk v Blanchard,

233 AD 555, 561; 253 NYS 307 (1931).]

In Hobart v Vanden Bosch, 256 Mich 686, 687; 240 NW 1 (1932), the issue involved the

unlawful conversion of bank stock trust shares. The plaintiff had already paid $938.50 of the price

for the shares. When he later offered the balance of $126.90, it was refused and the shares not

given to him. Id. at 688-689. On several occasions after this, the plaintiff demanded the shares

and was refused. Id. at 689-690. One of the defendants’ challenges was “the sufficiency of

plaintiff’s tender of payment.” Id. at 692. The Supreme Court did not clarify what the defendants

had found insufficient, but held that the defendants could not hide behind this reasoning because

they would not have accepted any form of tender:

It is undisputed that plaintiff at the time he demanded his stock . . . , and before the

receivers were appointed, was ready and willing to pay the balance of the purchase

price, and, in fact, tendered his check in payment at the time. There is no claim by

appellants that a more technically perfect tender of payment if made would have

been accepted at that time or at any subsequent time after the receivers were

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appointed. That such tender, if made, would not have been accepted is established

by this record. Under such circumstances, a further tender would have been idle,

and is not required in law. [Id.]

The case of Hanesworth v Hendrickson, 320 Mich 577, 578; 31 NW2d 726 (1948)

concerned a “suit for specific performance of an agreement to sell real estate . . . .” The plaintiffs

paid $500 up front, with $10,200 still to be paid. Id. “[W]ithin the time provided for performance

and before [the] plaintiffs demanded performance, [defendant] Hendrickson definitely informed

plaintiffs that defendants would not surrender possession of the property.” Id. Even when

testifying later, defendant Hendrickson still refused to deliver possession. Id. at 579. Nevertheless,

the defendants argued as a defense that the plaintiffs had not tendered the balance of the payments

for the real estate. Id. at 578. The Supreme Court held that “[u]nder such circumstances a tender

of the purchase price by plaintiffs would have been an idle ceremony and the fact that plaintiffs

did not make such tender cannot be asserted as a defense. . . . Obviously if tender had been made

it would not have been accepted . . . .” Id. at 578-579. Further, in their complaint the plaintiffs

indicated that they had been and remained ready and willing to complete the transaction as set

forth in the agreement. Id. at 579. The Supreme Court held that this did constitute “tender of

performance.” Id.

In this case, the restriction agreement does contain broad language about allowing only the

types of transfers specifically enumerated in it. The only situations for which it specifies detailed

procedures are for the death of a party, an offer to buy, an involuntary transfer, and a voluntary

transfer to another original party. These different provisions have different rules for the number

of days an option will be available. That is, it is important to determine the nature of the situation

in order to determine the specific applicable rules. Notably absent are the very situations involved

with Kathleen’s transfer to herself and Virgil, and Virgil’s transfer to respondent: voluntary

conveyances for no consideration. The trial court simply stated that the agreement actually did

prevent Kathleen’s transfer, without providing detailed analysis concerning why this was so. But,

on appeal, respondent accepts that the agreement, if found reasonable, did not allow Kathleen’s

transfer. Respondent thus waived any argument to the contrary.

The parties and the trial court agree that Kathleen’s transfer was therefore void under the

agreement. If petitioner had timely objected, the transaction would have been voided and the

property would have remained in Kathleen’s sole possession, eventually passing to her estate.

Petitioner does not appear to dispute respondent’s contention that Kathleen’s estate passed

everything, including the subject property, to Virgil in any event, leaving petitioner the opportunity

to exercise his option to purchase upon Virgil’s death. The option language required him to “serve

notice in writing of such election upon the deceased Party’s personal representative and/or trustee.”

No tolling for appointment of the personal representative is mentioned. Petitioner does not contest

respondent’s assertion that it was known immediately after Virgil’s death that respondent would

be the personal representative.

But petitioner did not attempt to exercise an option until May 10, 2021, at the earliest—

that was the date his request for sale was signed, but it was neither formally filed, nor apparently

received by respondent, until May 21, 2021. The timeline of possible events giving rise to an

objection, or to exercise of an option, was as follows: Kathleen’s transfer on December 21, 2016,

Kathleen’s death on February 26, 2017, Virgil’s transfer on June 15, 2018, and Virgil’s death on

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January 31, 2021. As noted, the most generous amount of time that the agreement allows to

exercise an option is 90 days. And that is only if an original party has died, the other parties take

the full 60 days to decide that they do not want to buy as a group, and then the party that does

decide to buy alone takes the full 30 days allowed to serve notice in writing to the personal

representative. The parties have not presented any evidence concerning any discussion between

Linda and petitioner about their decision to buy collectively. If Linda was clearly not going to be

a group buyer, for example, then the applicable time limit would have been even smaller. But

even under the most generous assumption, that Linda and petitioner considered a group buy for

the full 60 days, May 1, 2021, was the last possible date by which petitioner had to give notice to

respondent in respondent’s capacity as Virgil’s personal representative. Petitioner failed to meet

that deadline. The option terms for tender require only that written notice be served on the personal

representative. That is, petitioner needed to give a simple notice in writing to his brother. Yet

petitioner does not assert that he even orally informed respondent in time.

Petitioner’s primary excuse for missing the deadline is that serving written notice would

have been pointless, because respondent would have contested it. There is caselaw standing for

the proposition that, where performance would be a useless formality, performance is excused.

See Hanesworth, 320 Mich at 578-579; Weinburgh, 303 Mich at 644-645; Hobart, 256 Mich at

692. The common thread in that caselaw is defendants who refused the plaintiffs’ payments, then

complained that they did not receive tender. The analogous situation here would be if respondent

told petitioner to not even bother sending him written notice of exercising the option, and then

later presented as a defense the lack of written notice. That is obviously not what happened. Much

more relevant caselaw indicates that providing notice, regardless, remains a crucial way of

signaling the intent to exercise an option. Again, exercising an option requires “strict compliance”

and must be done “within the time specified; otherwise the right is lost.” Bailey, 237 Mich at 554-

555. By providing timely notice, petitioner would have been preserving his rights, even if a dispute

and litigation were to follow. Under petitioner’s conception of the law, contractual deadlines could

properly be ignored when an objection and legal dispute over the action would follow. While he

missed the deadline by at least 9 days, petitioner appears to take the stance that he could have

missed it by any amount of time and still preserved his option, because respondent was going to

oppose his claim.

As discussed above, this deadline was particularly important because restraints on

alienation are subject to a reasonableness review. See LaFond, 226 Mich App at 451. Part of what

made the instant restraint on alienation reasonable was that 90 days was the actual maximum

amount of time to exercise an option: if notice of it was not received by then, the option right

expired. Petitioner’s position removes this clear line, and renders nebulous the amount of time

that an interest holder under the agreement might assert an option. This conception of the option

deadline would very likely render the restriction agreement unreasonable and illegal. The

restriction agreement grants valuable option rights to petitioner, if he follows the clearly specified

procedure. It is inconsistent for petitioner to stress so greatly the benefits that the restriction

agreement was supposed to give him, while minimizing his failure to meet its simple requirement

for those benefits. Petitioner must be held to the applicable deadline.

The trial court justified petitioner’s failure to act after Kathleen’s death by describing how

Kathleen had already clouded title to the subject property. But petitioner’s own position appeared

to be that he had not planned to attempt to buy the property at that time, regardless of the status of

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title. The trial court’s decision offered two alternatives: return the property to Kathleen’s estate,

or return it to Virgil’s estate. Even offering the first alternative was unusual, given that petitioner

did not request going back that far. Petitioner was focused only on buying the property from

Virgil’s estate. The trial court stated that petitioner’s rights to purchase the property were not

extinguished when the option after Kathleen’s death ran out. This was accurate: as the trial court

stated, purchasing it after Virgil’s death was also a clear option for petitioner.

But the trial court ended its analysis there, not mentioning the deadline for purchasing after

Virgil’s death, or that petitioner missed it. This was the more important situation to focus on:

petitioner was asking to exercise his option upon Virgil’s death, not Kathleen’s. The trial court’s

concern over clouded title was misplaced because it had no effect on petitioner’s failure to act

timely. Petitioner first chose not to exercise the option on Kathleen’s death, apart from any title

concern, then failed to act timely after Virgil’s death. On appeal, petitioner does not attribute this

failure to confusion over clouded title. He does not claim that he did not know respondent would

become personal representative. Instead, he argues that he was permitted to claim an option past

the deadline if the other party would have contested it even if timely exercised. Petitioner is

incorrect. As petitioner points out, the restriction agreement clearly voided Virgil’s 2018 transfer.

Simply giving notice of his intent to exercise his option was not excused by this void transfer.

We recognize the equitable concerns involved here. Petitioner has invested money and

time in the subject property. However, no matter what happens with the 1/3 interest at stake in

this case, he will continue to own the 1/3 tenancy in common he had from the beginning, the 20%

of Linda’s portion he has already been given, and, according to petitioner, the rest of Linda’s

portion pursuant to her estate plan. The nature of the tenancy in common arrangement ensures

that petitioner is not being robbed of property he has invested in. And as long as Linda is alive,

the restriction agreement continues to bind any who do become interest holders, continuing to give

petitioner an option to later obtain their interests (if he complies with the specified procedures).

Petitioner also remains free to offer to buy any portions of the interest that Virgil’s will did not

bequeath to him. Because Virgil’s transfer was invalid under the restriction agreement, the

property belongs in Virgil’s estate. Distributing the property according to the terms of Virgil’s

will is the result required by the restriction agreement. This course of action avoids respondent

obtaining the property interest by an invalid transfer, or petitioner obtaining it by expired option.

It both follows the terms of the restriction agreement, and appears to be the most equitable solution.

Therefore, with regard to petitioner’s motion for summary disposition brought under MCR

2.116(C)(9), respondent’s defense that petitioner failed to timely exercise his purchase option

should have prevailed. Respondent’s pleading described how Virgil died on January 31, 2021,

that the first notification of petitioner’s use of the option was received May 21, 2021, and argued

that this meant the option had expired. It therefore clearly met the standard of pleading a valid

defense to a claim. See Slater, 250 Mich App at 425. Accordingly, the trial court erred by holding

that respondent failed to present a valid defense to the contract claim.

However, the parties do not indicate that they agree on what the ultimate result should be

if the subject property is returned to Virgil’s estate. Reviewing the will, it appears there are two

possibilities. If the mentioned “ten (10) acres West of and adjacent to the West line of my

homestead farm” is part of the property interest at issue in this case, then adjustments must be

made concerning which of the specified schemes applies. If the subject property interest is not

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related to this “ten (10) acres West of and adjacent to the West line of my homestead farm,” then

the property interest simply passes through the residuary provision, to be given in equal parts to

the five offspring of Kathleen and Virgil. Because this issue has not been addressed in the trial

court, we remand the matter to the trial court for that determination. However, disposition of the

property interest should depend on the terms of the will, and not the void deed to respondent.

Again, Virgil Hoppert’s 2018 deed to respondent is void, and petitioner’s contractual option to buy

the property interest from the Estate of Virgil Hoppert has expired.

In summary, we affirm the trial court’s order to the extent it concluded that the restriction

agreement was legal, but we vacate the order to the extent it granted petitioner’s motion for

summary disposition and held that respondent failed to present a valid defense to the contract

claim. This matter is remanded to the trial court to determine the proper disposition of the property

interest as a part of the Estate of Virgil Hoppert.

Affirmed in part, vacated in part, and remanded for proceedings consistent with this

opinion. We do not retain jurisdiction.

/s/ Brock A. Swartzle

/s/ Mark J. Cavanagh

/s/ Anica Letica

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