Summary 2008 WY 10

Summary of Decision issued February 1, 2008

Summaries are prepared by Law Librarians and are not official statements of the Wyoming Supreme Court.

Case Name: Christensen v. Christensen and Hamblin

Citation: 2008 WY 10

Docket Number: S-07-0061

Appeal from the District Court of Teton County, the Honorable Nancy J. Guthrie, Judge

Representing Appellant (Plaintiff): David G. Lewis, Jackson, Wyoming.

Representing Appellee (Defendants; Defendant-Intervenors): Franklin J. Falen, Brandon L. Jensen, Kathryn Brack Morrow of Budd-Falen Law Offices, LLC, Cheyenne, Wyoming.

Facts/Discussion: Wynn Christensen, Renee C. Hunter and Rex E. Christensen (Buyers) brought an action against their siblings, C. Burke Christensen, Peggy C. Miller, Joan S. Hamblin and Diane C. Buxton (Sellers) seeking an interpretation of a stock purchase agreement and enforcement of a provision of their mother’s will.
When the Court reviews orders granting summary judgment, they consider the record de novo.
The Stock Purchase Agreement: Buyers contend the district court misinterpreted the agreement when it concluded that it permitted the Sellers to sell their stock to a third party. Sellers claimed the district court correctly concluded that the agreement permitted them to transfer their stock to a third party if Buyers did not exercise their right to purchase the stock within 30 days of receiving notice. When the Court considers the meaning of a contract, they focus on the parties’ intent and if possible, from the language used in the agreement. Article 5 provided a mechanism by which the stockholders could purchase the shares of any stockholder who during his or her lifetime wished to withdraw from the company. Considering Article 5 in the context of the entire agreement and giving the words their plain and ordinary meaning in light of the stated purpose of the agreement, the Court concluded the agreement required any stockholder wishing to sell his stock to give written notice of that desire to the other stockholders and the corporate secretary. The Court further concluded that the other stockholders had the right to purchase the total shares owned by the other stockholders excluding the seller within 30 days of the notice. If a particular stockholder was unable or unwilling to buy the stock or his proportionate share, the other stockholders had the right to purchase the balance. Generally, the law favors the free alienability of property interests. Absent language clearly reflecting the parties’ intent to restrict the transfer of a property interest, the Court was not inclined to conclude that was the parties’ intent.
The Will Provision: In deciding the issue presented, it would be appropriate for the Court to consider evidence of circumstances surrounding execution of the stock purchase agreement in determining parties’ intent. It would not be appropriate to consider the will. The will, executed in 1982 provided no context to the setting in which the stock purchase agreement was negotiated and signed ten years earlier. It was irrelevant to the interpretation of the agreement.
Sellers’ Offer: The record showed that each Seller gave separate written notice to the corporate secretary of their desire to sell all of their shares. It was also undisputed that by email, Burke Christensen notified Buyers that all four sellers were willing to sell and there was no dispute that Buyers received the email. The Court concluded that Sellers fulfilled the requirements of the agreement by giving notice in January and waiting 30 days which made discussion of the February notice unnecessary. Having fulfilled the requirements, Sellers were free to sell to a third party and had no obligation to give Buyers a second opportunity to purchase their shares. Having no such obligation, they likewise were not required to state a sale price in accordance with Article 7.

Holding: The Court affirmed the district court’s order granting summary judgment to Sellers on the claims brought under the stock purchase agreement. They held the will was not relevant to the issues presented and that any challenge to the will should have been made in accordance with the Idaho Probate Code.

Affirmed.

J. Kite delivered the decision.

Link: http://tinyurl.com/2tw2dt .

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