Florida/Georgia Personal Injury & Workers Compensation

...57, 680 P.2d 193, 194 (Ct.App.1984); see also Shaver v. Clanton, 26 Cal.App.4th 568, 31 Cal.Rptr.2d 595, 596 (1994) (describing the rule against perpetuities as "every first-year law student's worst nightmare"). Specifically, we must decide whether section 689.225, Florida Statutes (2000), which addresses the same rule, retroactively abrogated the common law rule. We also consider whether the rule applies *1281 to rights of first refusal, which are at issue here. We review Old Port Condominium Ass'n One, Inc. v. Old Port Cove Holdings, Inc., 954 So.2d 742 (Fla. 4th DCA 2007), which held that section 689.225 retroactively abrogated the rule....

...That court certified conflict with Fallschase Development Corp. v. Blakey, 696 So.2d 833 (Fla. 1st DCA 1997). We have jurisdiction to resolve the certified conflict. See art. V, § 3(b)(4), Fla. Const. We first resolve the conflict by holding that section 689.225 did not retroactively abolish the common law rule against perpetuities....

...The trial court declared the right of first refusal void ab initio and quieted title in the Owners' favor. Relying primarily on Fallschase, 696 So.2d 833, the court concluded that the Agreement violated the rule against perpetuities and rejected the Association's argument that section 689.225, Florida Statutes, retroactively abolished the rule....

...Although not deciding the issue, the court noted that a right of first refusal does not involve remote vesting and doubted "that the common law rule against perpetuities ever applied to this kind of right of first refusal." Old Port Cove, 954 So.2d at 743. The court then held that, assuming the rule did apply, section 689.225, Florida Statutes, retroactively abrogated it....

...In Fallschase, 696 So.2d at 833, the First District considered two issues: (1) *1282 whether a right of first refusal in a contract violated the common law rule against perpetuities; and (2) whether the right of first refusal should be reformed under section 689.225(6)(c), Florida Statutes (1995) (allowing reformation of a nonvested property interest created before October 1, 1988, where the property interest violated the rule against perpetuities as it existed when the interest was created)....

...d unless: 1. When the interest is created, it is certain to vest or terminate no later than 21 years after the death of an individual then alive; or 2. The interest either vests or terminates within 90 years after its creation. Id. § 1 (codified at § 689.225(2), Fla. Stat. (1989)). With eight exceptions, the statute excludes nonvested property interests and powers of appointment arising out of "a nondonative transfer." Id. (codified at § 689.225(5)(a), Fla....

...ormed "in the manner that most closely approximates the transferor's manifested plan ... and is within the limits of the rule against perpetuities applicable when the nonvested property interest or power of appointment was created." Id. (codified at § 689.225(6)(c), Fla. Stat. (1989)). In 2000, the Legislature added the following language to section 689.225(7): "This section is the sole expression of any rule against perpetuities or remoteness in vesting in this state. No common-law rule against perpetuities or remoteness in vesting shall exist with respect to any interest or power regardless of whether such interest or power is governed by this section." Ch. 2000-245, § 1, Laws of Fla. (codified at § 689.225(7), Fla....

...hts of first refusal. On that issue, we conclude that, because the same concerns about remote vesting do not exist with respect to rights of first refusal, the rule does not apply to such rights. A. Retroactive Abrogation The Association argues that section 689.225(7), Florida Statutes, has retroactively abolished the common law rule against perpetuities....

...In determining whether a statute applies retroactively, we consider two factors: (1) whether the statute itself expresses an intent that it apply retroactively; and, if so, (2) whether retroactive application is constitutional. See, e.g., Chase Fed., 737 So.2d at 499. We conclude that the plain language of section 689.225 does not evince an intent that the statute apply retroactively....

...See, e.g., Memorial Hosp.-W. Volusia, Inc. v. News-Journal Corp., 784 So.2d 438, 441 (Fla.2001) (finding it unnecessary to reach the second prong of the retroactivity analysis absent clear legislative intent to apply the statute retroactively). The Association argues that section 689.225(7) reflects an intent to retroactively abolish the rule....

...power regardless of whether such interest or power is governed by this section." We agree that this language reflects an intent to abrogate the common law rule. We disagree, however, that it reflects a clear intent to do so retroactively. Nothing in section 689.225(7) states, or even implies, that it is to be applied retroactively. It reflects only an intent to abrogate the common law rule. Moreover, retroactivity would be inconsistent with the immediately preceding subsection. See § 689.225(6), Fla....

...1994) (noting that two consecutive subsections of the same statute should be read in pari materia ). That subsection provides that the statutory rule against perpetuities "applies to a nonvested property interest or power of appointment that is created on or after October 1, 1988. " § 689.225(6)(a), Fla....

...Further, it permits judicial reformation of interests created before October 1, 1988, "in *1285 the manner that most closely approximates the transferor's manifested plan ... and is within the limits of the rule against perpetuities applicable when the nonvested property interest or power of appointment was created. " § 689.225(6)(c), Fla....

...The Rule Against Perpetuities Does Not Apply to Rights of First Refusal While we have resolved the certified conflict, the decisive question in this case is whether rights of first refusal are subject to the common law rule in the first place. Rights of first refusal are not subject to the statutory rule. See § 689.225(5)(a), Fla....

...Auth., 501 N.Y.S.2d 306, 492 N.E.2d at 385 (recognizing that, at least in commercial settings, rights of first refusal are "best regulated by the rule against unreasonable restraints on alienation"). *1289 IV. CONCLUSION We resolve the certified conflict by holding that section 689.225, Florida Statutes, has not retroactively abolished the common law rule against perpetuities....

...Old Port Cove, 954 So.2d at 746; see Iglehart, 383 So.2d at 615 ("[T]he law is clear that a repurchase option at market or appraised value for unlimited duration is not an unreasonable restraint."). [5] Because a right of first refusal is a contractual right, not a property interest, we need not consider section 689.225(6)(c), Florida Statutes, which permits reformation of "nonvested property interests" created before October 1, 1988.

...st perpetuities. The questions presented are: (1) whether the right of first refusal to acquire commercial property violates the common law rule against perpetuities, and (2) whether the "right of first refusal" should be reformed in accordance with section 689.225(6)(c), Florida Statutes (1995)....

...700,000.00] Dollars to Plaintiff's predecessor in interest in connection with the right of first refusal. Appellee filed a response to appellants' affirmative defenses, alleging in part: 18. Should the court decide to apply the curative provision of Section 689.225(6)(c), the Plaintiff would reply that the intention of the parties was that the right of first refusal should expire upon the death of Sally Weems, the original grantor of the right, who died on December 28, 1983.......

...gainst Perpetuities. 9. None of the affirmative defenses of Defendants FALLSCHASE and BAILEY is legally sufficient to bar the application of the Rule Against Perpetuities. 10. The statutory modifications to the Rule Against Perpetuities contained in § 689.225, Florida Statutes (1993), do not apply in this case since the Agreement predated the effective date of that statute....

...The effective date of the statute was January 1, 1979. See Ch. 77-23, § 2, Laws of Fla. The statute expressly exempts executory interests, such as a right of first refusal, from application of the rule. [2] In 1988, section 689.22 was repealed, to be replaced by section 689.225, the "Florida Uniform Statutory Rule Against Perpetuities." See Ch....

...irm the trial court's finding that the first refusal right here at issue was void ab initio because it violates the common-law rule against perpetuities. The invalidity of the first refusal right obviated application of the reformation provisions of section 689.225(6)(c). Therefore, appellee, as Mrs. Weems' successor in interest, possessed a vested right to dispose of the property to whomever he chose, without the impediment of the first refusal right. Because section 689.225(6)(c) changes existing law, and was intended to operate retroactively, we consider the reformation question posed in this case to be a matter of great public importance. Therefore, we certify the following question to the Florida Supreme Court pursuant to Article V, section 3(b)(4), of the Florida Constitution: Whether section 689.225(6)(c), Florida Statutes, is a remedial provision which may be applied retrospectively to reform a first refusal right to purchase real property, so as to bring exercise of the right within the limits of the common law rule against perpetuities. Accordingly, we affirm the final judgment on the pleadings. We certify as a question of great public importance the issue concerning retrospective application of section 689.225(6)(c)....

...WOLF, J., concurs and dissents with opinion. WOLF, Judge, concurring in part and dissenting in part. I concur with the majority's decision to certify a question of great public importance, but dissent from that portion of the opinion which declines to apply the provisions of section 689.225(6)(c), Florida Statutes (1989) to the present transaction....

...ourt may "reform the disposition in the manner that most closely approximates the transferor's manifested plan of distribution and is within the limits of the rule against perpetuities ..." as the rule existed at the time the disposition took place. § 689.225(6)(c), Fla....

...tten agreement. I am also unaware of a vested right to have a court strike down an obligation voluntarily undertaken as part of an enforceable written legal agreement. I would, therefore, effectuate the clearly expressed legislative intent and apply section 689.225(6)(c), Florida Statutes, in this case....

...gainst perpetuities. [4] If a grantor specifically attempted to perpetrate a fraud by effectuating a transfer knowingly in violation of the rule against perpetuities, the grantor also should not have the legal right to challenge the applicability of § 689.225(c), Fla....

...ere are profound doubts as to whether or not the Florida Legislature in its 1977 and 1988 enactments [1] clearly abolished the common law rule against perpetuities in respect to options in gross (as involved in the instant case). It now appears from section 689.225(7), Florida Statutes (2000), that such abolition of the common law rule was intended....

...law. We accordingly reverse the final judgment and remand for further proceedings consistent with this opinion. REVERSED AND REMANDED FOR FURTHER PROCEEDINGS. GRIFFIN and ORFINGER, R. B., JJ., concur. NOTES [1] §§ 689.22(3)(a)7, Fla. Stat. (1979); 689.225, Fla. Stat. (1988). [2] See Ch.2000-245, § 1, Laws of Florida (effective Dec. 31, 2000). [3] Ball argues that the reformation of the option by the trial court was warranted pursuant to section 689.225(4), Florida Statutes (1997), the Florida Uniform Rule Against Perpetuities....

...options to purchase in gross or in a lease or preemptive rights in the nature of a right of first refusal, but no option in gross is valid for more than 40 years from the date of its creation." § 689.22(3)(a)(7), Fla. Stat. (1977). This statute was repealed in 1988 and replaced by what is now section 689.225. See Ch. 88-40, § 2, Laws of Fla.; § 689.225, Fla....

...reform the disposition in the manner that most closely approximates the transferor's manifested plan of distribution and is within the limits of the rule against perpetuities applicable when the nonvested property interest . . . was created." [e.s.] § 689.225(6)(c), Fla. Stat. (1989). These words constitute a clear legislative mandate to apply section 689.225 retroactively....

...suggest, it certainly had the right to bring an action under the statute to reform the right. But invalidation of the right is the least preferred remedy under the statute. In 2000, ten years later, the Legislature added the following provision into section 689.225: "This section is the sole expression of any rule against perpetuities or remoteness in vesting in this state. No common-law rule against perpetuities or remoteness in vesting shall exist with respect to any interest or power regardless of whether such interest or power is governed by this section. " [e.s.] *745 Ch. 2000-245, § 1, Laws of Fla.; § 689.225(7), Fla. Stat. (2005). Retroactive application could hardly have been stated more clearly. Under these statutory provisions it is manifest that the legislature meant for section 689.225 to be applied forwards and backwards....

...law rule against perpetuities is fully retroactive and operative. There can no longer be any proper application of the common law rule against perpetuities in Florida. See Sander v. Ball, 781 So.2d 527, 528 (Fla. 5th DCA 2001) ("It now appears from section 689.225(7), Florida Statutes (2000), that such abolition of the common law rule was intended.")....

...There are strong policy reasons favoring this rule of validation. It simply makes no sense to suppose that a party to an agreement allocating benefits to both sides actually intends for an entire agreement to be void. This common sense principle of construction has now been codified by statute. § 689.225(7), Fla....

...75 right of first refusal contained in a contract. Although the holder of the right in Fallschase prayed for reformation under the statute, a majority of the District Court panel refused the statutory remedy. In discussing retroactive application of section 689.225, the Fallschase majority relied on the substantive-procedural distinction....

...Necessarily, it is incumbent on an appellate court to identify the rights that are vested and show how *746 they would be impaired by the retroactive application of the statute. The majority in Fallschase made no such attempt. The dissent in Fallschase, however, read section 689.225 as we have done: it was plainly intended to apply retroactively. 696 So.2d at 838 (Wolf, J., dissenting). The Fallschase dissent concluded that section 689.225 did not create any obligations or impose any penalties that were not already assumed by the complaining party under its agreement....

...e prepared to treat the appeal as a petition for writ of mandamus to direct the judge to exercise jurisdiction validly possessed. That is not appropriate here. [3] The common law rule against perpetuities has been replaced in Florida by statute. See § 689.225(7), Fla....