Know The Difference Between "Right of First Refusal" and "Right of First Offer"

The Washington Court of Appeals, Division Three, just released an opinion in Alan Kelly, et al v. Ammex Tax & Duty Free Shops West, Inc. explaining the difference between a "right of first refusal" and a "right of first offer". What's the big difference, they're pretty much the same right? No.

As the court explains: "A right of first offer gives the grantee of that right the right to buy property before it is offered for sale to third parties. A right of first offer is different than a right of first refusal. A right of first refusal gives the grantee the right to meet an offer made by a third party, before the landowner is free to sell the property to that third party." (Emphasis Added).

This became a significant issue in the case because the grantee, Ammex, had a right of first offer. However, the grantor, Norman Jensen, essentially considered this right to be a right of first refusal. As such, Jensen put the property for sale - without first offering the right to Ammex. Jensen then obtained a buyer who offered to purchase the property for $420,000.00. After obtaining the offer, Jensen offered the property to Ammex for $430,000.00. Ammex later made the claim that the right of first offer gave them the right to purchase before Jensen put the property on the market.

The trial court disagreed with Ammex's position and dismissed the claims. However, on appeal Division Three explained the difference between the "right of first offer" and "right of first refusal" and reversed the trial court. Division Three went on to state that Ammex's right of first offer was a preemptive right and as such they should have been given the opportunity to make the first offer on the property before it went on the market.

Clearly the two provisions can be seemingly close in hand, but the difference is rather big given the order in time in which the right vests. Get to know the difference.

Washington Supreme Court Denies Recall Petition of Mark Lindquist

For those living in Tacoma or near vicinity, you have likely heard about the ongoing issues with the Pierce County Assessor - Dale Washam (current assessor) - Mark Lindquist (current prosecutor) - battle. If not, just go the News Tribune and they can probably catch you up to speed.

However, political and off topic banter aside, the Washington Supreme Court did recently affirm a trial court's opinion denying the recall lawsuit against Mark Lindquist. The opinion can be found here.

The recall was at the request of current assessor's chief deputy and alleged that Mr. Lindquist failed to fulfill his duties as prosecutor by not going after the previous assessor (Ken Madsen) - because the previous assessor was not performing on-site inspections for property tax assessments. Well the trial court ruled the lawsuit and recall were frivolous and also issued an award of $50,000 in attorney's fees in favor of Mr. Lindquist. The WA Supreme Court upheld the trial court's ruling - including the amount of attorney's fees.

The News Tribune's staff reporter, Sean Robinson, called it a "legal beating". I have to agree it was a beat down, given the amount of attorney's fees assessed. Coincidentally, there was one dissent that suggested the amount of attorney's fees awarded was rather high. The dissent can be found here.

Update: Washington Foreclosure Fairness Act is Approaching - July 22, 2011

I previously posted about the new Washington Foreclosure Fairness Act here. I wanted to give a quick update that this new law will go into effect as of July 22, 2011 (the countdown is on). This should provide a tremendous resource and leverage back to Washington homeowners facing a potential foreclosure or trustee's sale of their home.

In anticipation of the new law housing counselors, banks, lenders, real estate attorneys, and mediators have been getting ready. The Washington State Department of Financial Institutions and Department of Commerce are also getting ready. The WA Department of Commerce has even put out a reader friendly guide to the new act that is very helpful - click this link to get the brochure. Or to get more information on the new Foreclosure Fairness Act you should visit either DFI or the Dept. of Commerce.

If this is the first time your hearing about the new Washington Foreclosure Fairness Act, be sure to check out my prior link, here. And Remember, though the Act is set to provide homeowners a greater opportunity with working with their lender or bank, you will still need to take affirmative steps to secure your rights. If you fail to respond to the initial letter or notice, within the designated time period, you may end up with a notice of default and a subsequent trustee's sale of your home. There are options out there, so do not ignore them.

Also, here's a special report from Chris Thomas of Public News Service (WA) featuring yours truly discussing the new benefits of the WA Foreclosure Fairness Act:

http://www.publicnewsservice.org/index.php?/content/article/21040-1

Here's another update from DFI: http://finlit.blogspot.com/2011/07/landmark-program-that-helps-struggling.html

Also here's another new update from WA Foreclosure Legal Aid Project: Another $1Million Given to Project: http://www.atg.wa.gov/BlogPost.aspx?id=28712

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Corporations and Limited Liability Companies Must Have Attorney Representation in Court

Business entities, whether it be a limited liability company (LLC) or a corporation must be represented by an attorney in court. Even if you are a sole owner of the LLC or a corporation, you cannot represent your own company - you must have a lawyer do so. Do not find this out the hard way. The court may dismiss the case and/or award sanctions against you.

The WA Court of Appeals, Division I, affirmed this principle today in the opinion of Dutch Village Mall (LLC) v. Raymond Pelletti (holding that LLC must be represented by an attorney to litigate matters). This principle was previously established in Lloyd Enters., Inc. v. Longview Plumbing & Heating Co., 91 Wn. App. 697, 701, 958 P.2d 1035 (1998) (which stated "Washington law, with limited exception, requires individuals appearing before the court on behalf of another party to be licensed in the practice of law.") This same principle was also upheld in the unpublished opinion of Ponderosa Hill, Inc. v. County of Spokane.

The reasoning behind this rule is that all pleadings must be signed either "pro se" (by oneself) or by a licensed attorney. Business owners, doing business under entity protection (LLC, Corp, etc.), should always remember that the entity is always separate and distinct from oneself and only those licensed to practice law may represent the interests of someone else (or an entity) in court. You cannot benefit from the protections of an entity and then ignore them at your choosing. Hence, you cannot file pleadings or litigate matters on behalf of the entity.

Spokane Hoopfest: Contempt of Court

This past weekend some of my other attorney colleagues and I participated in the annual Hoopfest weekend over in Spokane, WA. If you've never heard of Hoopfest, it is the largest 3-on-3 basketball tournament in the world. It truly is an amazing sight to see and nearly shuts down the entire city. The tournament has over 450 brackets ranging from all different ages, skill level, and yes height.

Our team went by the name of "Contempt of Court" and despite losing some close early games we were able to pull off a string of victories and win our consolation bracket. So without further ado here is a pic of "Contempt of Court" and yours truly on the way to becoming the "Loser Kings" of our bracket.

Also a great opportunity to get back to my old law school stomping grounds of Gonzaga.