Daily Development for Tuesday, January 20, 2004 
by: Patrick A. Randolph, Jr. 
Elmer F. Pierson Professor of Law 
UMKC School of Law 
Of Counsel: Blackwell Sanders Peper Martin 
Kansas City, Missouri 
dirt@umkc.edu 
OPTIONS; FIRST REFUSAL; DURATION: Absent clear language 
in the agreement to the contrary, first refusal rights do not apply to 
donation of property and do not "run with the land;" to bind donees. 
Park Station Limited Partnership, 378 Md. 122, LLLP v Bosse, 835 A. 
2d 646 (Md. 2003) 
This little case epitomizes the Vietnam era ironic conundrum "We had to 
destroy the village to save it." 
Bosse owned a small tract with retail establishments on it, abutting a 
highway. Park owned properties also devoted to retail use, located on 
three sides of the Bosse track. Park and Bosse entered into a cross 
easement agreement to facilitate the retail activities on their respective 
land. As part of that agreement, Bosse included a separate right of first 
refusal to Park to acquire the Bosse parcel. 
Later Bosse elected to donate its property to a religious foundation. Park 
argued that this transfer triggered the right of first refusal, citing the 
economic value of the tax deduction that Bosse would receive. Bosse 
responded that a gift does not trigger a right of first refusal and that, 
further, the right of first refusal was void because if violated the Rule 
Against Perpetuities. 
The Maryland Court of Appeals held that the gift did not trigger the 
refusal right. The court noted that, by its own terms, the right was 
triggered by a "sale" of the property, and concluded that, in common 
terminology, a gift, is not a sale. A "sale" requires that the party 
undertaking the transfer receive valuable consideration in return for the 
transfer. Even if the donor of property obtained a collateral tax benefit 
from the transfer to the foundation, this was not consideration given for 
the transfer sufficient to render the transaction a sale. 
The court cited cases in West Virginia, Idaho, Massachusetts and 
California, all reaching similar 
results. 
Although this would have resolved the instant matter, the court took up 
the question, on cross appeal, of whether the refusal right violated the 
Rule Against Perpetuities, which apparently remains viable in the classic 
common law version in Maryland and applies to commercial interests. 
Note that there was no subsisting lease here to "insulate" the interest 
from the Rule. The court does not discuss whether the presence of the 
cross easement agreement might provide similar insulation, but it does 
seem apparent that a perpetual cross easement agreement is a very 
different type of transfer than a lease and there is no particular reason to 
believe that such an easement would provide the same benefits as a lease 
vis a vis the Rule. 
The court held that the right of first refusal did not violate the Rule 
Against Perpetuities here because it was not intended to "run with the 
land," but only to apply to the property while it was in the hands of the 
Bosses. It did a close reading of the text to note that in some cases the 
parties expressly included the language "successors and assigns," but did 
not include it in the provision deal with the refusal right.. It concluded 
that a general paragraph stating that all provisions in the agreement 
bound successors and assigns was, in context, applicable only to the 
various servitude provisions, and not to other provisions, such as the 
refusal right. It also noted that the language of the refusal right referred 
to the Bosees by name. The court cited authority in a number of 
jurisdictions to the effect that such refusal rights are presumed to apply 
only to the ownership of the original grantor. Further, it cited authority 
to the effect that instruments should be construed to prevent violations of 
the Rule Against Perpetuities. 
Of course, as noted, by concluding that the right was effective only 
against the Bosees, the court saved it from destruction under the Rule, 
but also rendered it useless, since the Bosees no longer owned the 
property in question. Thus, the donee foundation could sell the property 
for cash the day after the donation, and the holder of the refusal right 
would be helpless to enforce that right. 
Comment 1: A noted Maryland practitioner has pointed out that the court 
neglected to deal with the effect of a Maryland statute that states 
categorically that a real property interest is binding upon successors and 
assigns unless the language of the grant expressly states otherwise. 
Although, clearly, this statute ought to have been mentioned and 
evaluated, the editor can see the argument that the statute ought not to 
apply where language in the grant implicitly makes clear the parties' 
intent, even though there is no express negation of an intent that the 
interest run. Whether this is a case where such implication is appropriate 
is a question for readers to evaluate on their own. 
Comment 2: For a DIRT DD concurring with the court on whether a 
refusal right should apply to donations of the subject property, see 
Cottrell v. Beard, 9 S.W.3d 568 (Ark. Ct. App. 2000) (the DD for 
9/27/00) (this case is vague on whether the interest runs to bind the 
donee.) For a DIRT DD concurring with the court on the application of 
the Rule Against Perpetuities, see Murphy Exploration & Production 
Company v. Sun Operating Limited Partnership, 747 So.2d 260 (Miss. 
1999) (the DD for 10/06/00) (involving a "wait and see" style version of 
the Rule).