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Khwaja v. Khan

Court of Appeals of North Carolina

January 20, 2015

TARIQ M. KHWAJA, Plaintiff,
v.
MOHAMMED S. KHAN and wife, HASEEB AKHTAR, MOHAMMED PERVEZ IQBAL and wife, IRSHAD BEGUM, Defendants

As Corrected January 23, 2015.

Editorial Note:

This Decision is not final until expiration of the twenty-one day rehearing period. [North Carolina Rules of Appellate Procedure 32(b)]

Davidson County. No. 12 CVS 2539.

REVERSED AND REMANDED in part, VACATED, in part.

Sharpless & Stavola, P.A., by Eugene E. Lester, III, for Defendant-appellants.

Morgan Herring Morgan Green & Rosenblutt, L.L.P., by John Haworth and James F. Morgan for Plaintiff-appellee.

DILLON, Judge. Judge DIETZ concurs. Judge BRYANT concurs in the result only.

OPINION

DILLON, Judge.

Appeal by Defendants from an order entered 25 April 2014 by Judge W. David Lee and orders entered 29 October 2013 by Judge Theodore S. Royster in Davidson County Superior Court. Heard in the Court of Appeals 19 November 2014.

Defendants seek review of orders granting summary judgment and costs, including attorneys' fees, in favor of Plaintiff and of the denial of their Rule 60(b) motion for relief from these orders. For the following reasons, we reverse and remand the orders granting summary judgment and costs, and we vacate the order denying the Rule 60(b) motion as moot.

I. Synopsis

Plaintiff, who is a tenant of a commercial building, brought this action against his landlord and others to enforce a provision in his lease granting him a preemptive right, otherwise known as a right of first refusal, to purchase the building, claiming that this preemptive right vested when the landlord agreed on terms to sell the building to a third party.

Based on this Court's holding in New Bar Partnership v. Martin, 221 N.C.App. 302, 729 S.E.2d 675 (2012), we hold that the provision in the lease granting the tenant the preemptive right is subject to and violates the common law rule against perpetuities and is, therefore, void. Specifically, the period during which Plaintiff's preemptive right could have vested under the lease provision was not tied to any life in being and, otherwise, extended beyond 21 years. Accordingly, we conclude that Defendants -- and not Plaintiff - are entitled to judgment on Plaintiff's claims as a matter of law.

II. Background

Plaintiff (hereinafter referred to as " the Tenant" ) commenced this action to enforce his preemptive right under the Lease and for other relief. Defendants answered, praying that the Tenant's claims be dismissed with prejudice. The parties filed cross motions for summary judgment, and the evidence presented at the hearing on those motions tended to show as follows:

In 2009, Defendants Mohammed S. Khan and his wife Haseeb Akhtar (the " Landlord" ) entered into a written agreement (the " Lease" ) to lease a commercial building in Davidson County to the Tenant, Plaintiff Tariq M. Khwaja. The Lease provided for an initial term of 15 years and granted the Tenant an option to renew for an additional term of " 5 to 10 years." The Lease further provided that if at any time " during [the] period of [the Lease]" the Landlord agreed on terms with a third party to sell the property, the Landlord was required to first allow the Tenant the opportunity to ...


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