Contract Claims a Sagaponack Farmhouse
After losing a protracted legal battle, the children of the late John C. White Jr., a member of a Sagaponack farming family that dates back to the late-17th century, were forced to sell their father's farmhouse on Friday.
The house, which was built in the 1880s and is located on a nearly three-acre parcel of land on Sagg Main Street, became the latest focus of a 20-year contract dispute between the White family and Anthony Petrello, a Houston-based oil and gas company executive who purchased 9.56 acres of oceanfront property from the family in 1998.
As part of that deal, which went through a decade of litigation before being finalized, Mr. Petrello had negotiated a right of first refusal on any other parcels of land that the White family -- which, at one point, had been in possession of more than 50 acres -- intended to sell to anyone who was not a descendant of Mr. White.
That clause in the contract formed the basis for Mr. Petrello's claim against the current defendants in the court case, Jeffery G. White and Thomas D. White, Mr. White's sons and the co-executors of his estate. Mr. Petrello argued that the family had denied him the opportunity to purchase the farmhouse's parcel of land, referred to as "lot 1" in court proceedings, when they transferred ownership of it into a family trust in November of 2000. At the time, the value of the home had been appraised at $1.375 million.
Years of legal wrangling ensued, and then on March 8, Judge Denis R. Hurley of the eastern district of New York ruled that the Whites had indeed breached Mr. Petrello's right of first refusal and said that Mr. Petrello was entitled to buy the land at the value it had back in 2000. That price, of course, is a fraction of what the house is worth in today's real estate market. For instance, the current asking price for a 2.8-acre vacant lot on Sagg Main Street listed with Sotheby's International Realty is $9.6 million.
Although a gag order has reportedly been placed on all parties involved in the lawsuit, and attorneys for both sides did not return phone calls, the judge's decision reveals that the issue that tipped the case in Mr. Petrello's favor was the fact that the White family trust was ill-advisedly structured to include a class of "close friends." That meant that a third party, other than a White descendant or Mr. Petrello, had been granted rights to the property, thus triggering the right-of-first-refusal claim.
The latest court victory for Mr. Petrello does not bring his contractual dispute with the Whites to an end. Judge Hurley concluded his decision by pointing out that "there remain other claims pending in this matter."