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A.G.E.3/20/2003
This case involves a dispute over a right of first refusal. Henderson Buford acquired a piece of commercial property subject to a pre-existing ground lease. The lease agreement contained a first refusal granting the lessee the option to buy the property on the same terms as any contemplated sale. Neither Mr. Buford nor the previous owner informed the lessee of the sale to Mr. Buford before it occurred. When Mr. Buford did inform the lessee of the sale, the lessee threatened to enforce its right of first refusal unless Mr. Buford consented to a new sublease. Mr. Buford approved the sublease and the lessee made no further attempt to enforce its right. Three years later, however, the lessee assigned all its interest in the property to its sublessee, A.G.E., Inc. A.G.E. then sought to exercise the option to purchase and demanded the property for its estimated purchase price, less certain "damages." Shortly thereafter, Mr. Buford terminated the lease because of A.G.E. and the former lessee's failure to provide him with insurance certificates as required by the lease. After a partial summary judgment in favor of Mr. Buford, and a bench trial on the merits on the remaining issues, the trial court rendered its final judgment. The court determined that A.G.E. was bound by the previous lessee's election not to enforce its right of first refusal. The court also determined that Mr. Buford properly terminated the lease. A.G.E. appeals these rulings. Finally, the court determined that a lease clause stating that Mr. Buford was to "provide" sewer service unambiguously required him to "maintain" such service throughout the duration of the lease, and that Mr. Buford had breached this obligation. Mr. Buford cross-appeals this ruling. We disagree with A.G.E.'s contentions on appeal and will affirm those portions of the trial court's judgment that A.G.E. challenges. We agree with Mr. Buford's contention on cross-appeal and will reverse and render judgment in his favor on the issue of sewer-service maintenance.
BACKGROUND
In 1964, Paul Walter leased a tract of commercial property to Ralph Moreland in a standard ground lease with a forty-year term. The lease agreement contained a right-of-first-refusal provision that obligated the lessor to give thirty days' written notice to the lessee before any contemplated sale and to allow the lessee the option to purchase the land on the same terms. The lease agreement also contained a clause requiring the lessor's consent to any sublease.
Mr. Walter, the lessor, died in 1975, leaving the property to his daughter, Paulette Miller. Mr. Buford's law firm represented Ms. Miller in the probate proceedings. To pay her legal bill of $83,419, Ms. Miller assigned to Mr. Buford a 24.7 percent interest in the property. Meanwhile, Mr. Moreland, the lessee, had assigned his interest in the lease to Citizens State Bank of Gorman. Neither Ms. Miller nor Mr. Buford notified Citizens of the assignment to Mr. Buford. In 1995, Citizens assigned its interest in the lease to Mid Texas Bancshares, Inc. In 1997, Mr. Buford bought the remaining interest in the property from Ms. Miller for $125,000. Neither Ms. Miller nor Mr. Buford gave Mid Texas thirty days' written notice of this sale.
Mr. Buford eventually informed Mid Texas that he had acquired the property in January 1998. Soon after that conversation, Mid Texas protested that Mr. Buford had violated Mid Texas's right of first refusal, in breach of the lease agreement. Mid Texas threatened to file suit to enforce its right unless Mr. Buford consented to a new sublease. Mr. Buford did consent, and Mid Texas subleased the property to A.G.E. the next month and made no further attempt to enforce its option to pur
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