Monday, January 6, 2014

Urquhart v. Teller case brief

Urquhart v. Teller case brief summary
958 P.2d 714 (1998)

Appellant buyers brought an action against respondents, seller and non-profit corporation, to enforce an option to purchase. The seller and non-profit corporation filed a counterclaim to enforce restrictive covenants. The 21st Judicial District Court, Ravalli County (Montana) granted partial summary judgment for the buyers and for the seller and non-profit corporation of each other's claims. The parties appealed.

The buyers argued that they had an option to buy 10 acres of land from the seller who transferred the land to the non-profit corporation. The seller contended that the buyers had violated covenants that restricted constructing improvements on or selling portions of the property.


  • The court concluded that the district court properly granted partial summary judgment for the parties. The court found that the right of first refusal was void, as an unreasonable restraint on alienation. 
  • The restraint was unreasonable in view of the great disparity between the option price and the property's current market value and the failure of the buyers' legitimate purpose of obtaining ownership to neighboring property.
  • The court held that buyers and the seller did not intend for the covenants to be collateral agreements, therefore, they merged with and were extinguished by the unrestricted warranty deed.

The court affirmed the district court's decision.

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