Tuminno v. Waite

The defendant, Marjorie Waite, appealed from an order that directed the sale of the property she owned as tenant-in-common with the plaintiff, Cathy Tuminno. Waite and Tuminno acquired the property at issue during the settlement of their mother’s estate. At the time, Tuminno and Waite signed a settlement agreement with the other named defendants that granted James Flagella and the others the option to purchase the property in the event that Waite and Tuminno, either jointly or severally, decided to sell, assign, or transfer the property to anyone other than each other. Flagella and each of the other named defendants had sixty days after being notified to purchase the property for $120,000. The settlement agreement was afterward reduced to a document executed by Tuminno and Waite, stating that they granted Flagella and the other named defendants a sixty-day option to purchase the property for $80,000 if Waite and Tuminno desired to sell the property.

The Supreme Court, Chautauqua County, determined that the agreement created an option contract, which was triggered when Tuminno initiated this action to partition and sell the property. The appellate division ruled that the settlement agreement created a right of first refusal and not an option to purchase despite the use of the word “option” in the agreement. A right of first refusal is a “dormant right that is triggered when an owner decides to sell the property to third party at an agreed-upon price.” Markan Corp. v. Plane’s Cayuga Vineyard, Inc., 24 A.D.3d 1264, 1265 (4th Dep’t 2005). In addition, the Court held that Tuminno’s action to partition the property did not trigger the right of first refusal. Instead, the right of first refusal would only be triggered by the sale of the property after a court had partitioned it.

The Court also ruled that the supreme court erroneously ordered the sale of the property without first resolving the accounting issues and adjusting any equities. Further, the Court ruled that the right to partition must, in some circumstances, yield to the equitable exception that a court will not award partition to a party in violation of his or her own agreement. In this case, a partition that results in Tuminno and Waite each having a portion of the property would defeat the right of first refusal as it applies to the entire property. In order for a court to award partition, the entire property would have to go either Waite or Tuminno. Therefore, whoever received the whole property would owe the other party owelty as compensation for the unequal division of the property. The Court therefore vacated the supreme court’s order and remanded the case.

In addition, the Court also ruled that the supreme court erred in determining that the purchase price for the property was $120,000. The Court held that the recorded document reduced the price to $80,000. Hence, the correct purchase price was $80,000 and not $120,000.

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2013 WL 5496025, 2013 N.Y. Slip. Op. 06462

New York Court of Appeals: Schron v. Troutman Saunders, LLP

The matter before the Court was the result of a number of consolidated cases, but the parties immediately on appeal were SVCare Holdings, LLC and Cammeby’s Equity Holdings, LLC (“Cam Equity”).  The issue centered on two written agreements entered into as part of a plan by Schron, a real estate investor who controlled Cam Equity, Grunstein (Schron’s attorney), Forman (Schron’s investment banker), and managers and owners of SVCare.  As part of a plan to acquire a publicly-held nursing home company, the parties drafted two agreements.  The first gave Cam Equity an option to acquire 99.99% of SVCare.  The second provided that another of Schron’s entities (“Cam III”) would lend SVCare $100 million for capitalization of its subsidiary. The agreements were later amended while refinancing the nursing home company transaction.

After a period of litigation, the only claim now relevant before the Court was whether Cam Equity’s option was enforceable, where SVCare argued that it was contingent upon the $100 million loan.  SVCare also claimed that the $100 million loan was never paid and sought to introduce parol evidence to prove both of its claims. Related to the previous litigation, Schron and Cam Equity sought specific performance of the option agreement.  In that litigation, Cam Equity moved to exclude the parol evidence by SVCare that might be offered to prove that the “other good and valuable consideration” (from the option agreement) was intended to reference the $100 million loan agreement. Schron v. Troutman Saunders, LLC, 20 N.Y.3d 430, 433 (2013).

Upon SVCare’s motion to introduce parol evidence, Cam Equity argued that the other “mutual covenants” referenced by the option agreement were sufficient consideration for the option and objected to the attempt to insert the $100 million loan as part of the original agreement.  The Court held that Cam Equity’s interpretation of the option agreement comported with the precedential understanding of contract law for several reasons: (1) a writing that is clear, unambiguous and complete on its face must be enforced; (2) the simple inclusion of “other good and valuable consideration” did not create any ambiguity in the agreement; and (3) the business entities here were sophisticated enough to have included language relating to the $100 million loan had they intended it to be part of their agreement. Schron, 20 N.Y.3d at 433.   The Court affirmed the appellate division and held that Cam Equity was free to exercise its option.

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20 N.Y.3d 430 (2013)

Article: Why Opponents are Destined to Lose the Debate on Photo ID and Proof of Citizenship Laws: Simply Put – People Want Secure and Fair Elections

Not many would argue that banks should leave their front doors and vaults unlocked, even in towns lacking any reported cases of bank robbery. To the contrary, many banks and other places of business have security onsite despite the fact that they have never experienced a robbery or security incident. Yet, the line of reasoning that voting security laws are unnecessary because voter fraud is insufficiently widespread is consistently asserted by opponents of photo identification (ID) and proof of citizenship laws.1  Besides the fact that the premise is demonstrably false, the conclusion drawn by the opponents of these laws is an untenable one. It is no wonder that during the 2011 legislative session more states than ever before enacted photo ID and proof of citizenship laws.2

It is clear from the legislative activity in 2011 that proponents of voter ID and proof of citizenship laws are winning the debate in the court of public opinion. Beginning with Kansas, a total of seven state legislatures enacted laws to require photo identification at the time of voting, or to require proof of citizenship at the time of registration: Kansas, Wisconsin, Texas, Tennessee, South Carolina, Alabama, and Rhode Island.3  Then the voters of Mississippi added to this string of successes by passing a photo ID ballot issue in November 2011.4  Additionally, proponents of election security legislation are set to win the debate in the judiciary. This article outlines why photo ID and proof of citizenship laws are likely to become commonplace across the country by examining the Kansas Secure and Fair Elections Act (SAFE Act) in the context of the national debate on voter security laws.

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Kris W. Kobach: Kansas Secretary of State. A.B. 1988, Harvard University; M. Phil. 1990, Oxford University; D. Phil. 1992, Oxford University; J.D. 1995, Yale Law School.

  1. See, eg., Voter Fraud—The Solution in Search of a Problem, COMMON CAUSE (Mar. 25, 2011), http://www.commoncause.org/site/pp.asp?c=dkLNK1MQIwG&b=6672655; Oppose Voter ID Legislation—Fact Sheet, AM. CIV. LIBERTIES UNION (July 21, 2011), http://www.aclu.org/voting-rights/oppose-voter-id-legislation-fact-sheet; see generally The Voter ID Laws is an Expensive Solution in Search of a Non-Existent Problem Before the S. Comm. On Elections & Local Gov’t, 2008 Leg., 82d Reg. Sess. (Kan. 2008) (statement of Dan Winter, Exec. Dir., Am. Civil Liberties Union of Kan. & W. Mo.). []
  2. See Voter Identification Requirements, NAT’L CONF. OF ST. LEGISLATURES, http://www.ncsl.org/default.aspx?tabid=16602 (last updated Sept. 8, 2011). In 2011, twelve state legislatures passed strict voter ID legislation; however, five governors vetoed the bills. Id. This is compared to four states in 2005, the session with the second most activity. Id. []
  3. See KAN. STAT. ANN. § 25-2908(d) (2011); WIS. STAT. § 6.79(2)(a) (2011); TEX. ELEC. CODE ANN. § 63.0101 (West 2011); TENN. CODE ANN. § 2-7-112 (2012); S.C. CODE ANN. § 7-13-710 (2011); ALA. CODE § 17-9-30 (2011); R.I. GEN. LAWS § 17-19-24.2 (2012). []
  4. On November 8, 2011, Initiative 27 requiring any government issued photo identification before being allowed to vote was passed by a vote of sixty-three percent to thirty-seven percent. Joe Scott, Voter ID Initiative Approved, THE DAILY MISSISSIPIAN, Nov. 9, 2011, available at http://www.thedmonline.com/article/voter-id-initiative-approved. []