Field v. Costa (Appellant's Brief)

Field v. Costa, 2008 VT 75
State: Vermont
Procedural Status: Case concluded.
Date: 2008
Keywords: Contract law; right of first refusal; tortious interference with contract.
Summary of Facts and Issues:  In 2000, Vermont Land Trust (VLT) acquired a conservation easement on a 296-acre farm owned by the Costas, with a 10-acre abutting homestead area excluded from the easement. The easement also included a right of first refusal (ROFR) requiring the Costas to send a copy of any written offer to VLT, which then had 90 days to purchase. In 2004, the Costas reached a purchase and sale agreement to sell the easement property and homestead area to the Fields, at which point VLT exercised its ROFR and assigned its interest to neighboring dairy farmers, the Quesnels. The Fields then sued the Costas, the Quesnels, the real estate broker, and VLT, alleging breach of contract against the Costas and tortious interference against the other three defendants. On various summary judgment motions, the trial court dismissed all claims against the defendants.  Plaintiffs appealed.
Holding:  The Vermont Supreme Court upheld the trial court in all respects, although with a somewhat different analysis.  In particular, the Supreme Court held that: (1) The Fields had actual notice of the conservation easement, and thus inquiry notice of the ROFR.  (2) Because of such inquiry notice, the ROFR was an implied precondition of the purchase and sale agreement.  (3) The ROFR was valid even though it applied only to the easement property and not the homestead area. (4) VLT was not liable for tortious interference because it was simply exercising its contractual right and there was no evidence of malice, ill will or other improper motive. 
Analysis and Notes:  This case is a good lesson in the potential pitfalls of rights of first refusals.  Although it won the case, VLT ran into some trouble when one of its employees allegedly told the Fields that they were “too old” to run a dairy farm on the property.  The Fields milked this statement for all its worth, although VLT ultimately was able to pass it off as a “stray comment.”