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Daniels v. Anderson | 642 N.E.2d 128 (1994)
A contractual right of first refusal imposes a duty upon the landowner not to sell property to a third party without first offering to sell the property to the promisee. In Daniels versus Anderson, we explore what rights a first refusal holder has against a thirty party buyer who receives notice of the first refusal right after paying part of the purchase price.
James Anderson and Stephen Jacula sold a parcel of land, commonly known as the Daniels property, to William Daniels. Anderson and Jacula also owned land adjacent to the Daniels property, commonly known as the contiguous parcel. The parties’ contract granted Daniels a right of first refusal for the contiguous parcel.
Jacula later acquired sole ownership of the contiguous parcel and sold it to Nicholas Zografos for $60,000. Jacula didn’t first offer to sell the property to Daniels. A title search didn’t disclose Daniels’ right of first refusal because Daniels’s deed didn’t reference it and he hadn’t recorded the sales agreement. Zografos paid Jacula $10,000 up front and gave Jacula a note for the balance. Zografos first learned about Daniels’ right of first refusal after he’d paid $40,000 toward the purchase price. Zografos paid the remaining balance and took title to the property two months later.
Daniels sued Anderson, Jacula, and Zografos for, among other things, specific performance of his right of first refusal. Daniels also alleged that Jacula breached the parties’ agreement by failing to offer to sell the property to Daniels first. The trial court found that Jacula had breached the sales agreement and that Daniels was entitled to specific performance. The trial court ordered Zografos to convey the contiguous parcel to Daniels on the same conditions that Zografos had purchased it from Jacula. The trial court further ordered Daniels to pay Zografos the $60,000 purchase price plus the real estate taxes that Zografos had paid on the property. The Illinois Appellate Court affirmed the trial court’s ruling on that point. Zografos appealed to the Illinois Supreme Court.
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