Temple Hoyne Buell Foundation v. Holland & Hart
Colorado Court of Appeals
851 P.2d 192 (Colo. Ct. App. 1992)
The Buell Development Corporation (BDC) hired the law firm Holland & Hart (Holland) (defendant) to draft an option contract as part of a stock sale to Rocovich, a stockholder of Kings County Development Corporation (KCDC), under which BDC would acquire a share of any minerals KCDC later chose to distribute to its stockholders. When KCDC eventually distributed its mineral interests and BDC tried to enforce the option, KCDC refused, arguing the option violated the rule against perpetuities. BDC then sued Holland for legal malpractice over the drafting of the option, and the trial court agreed the rule against perpetuities applied and invalidated the option, after which a jury awarded BDC over $3 million in damages plus over $2 million in interest; Holland appealed the perpetuities ruling.
Whether the rule against perpetuities applies to an option contract granting mineral interests when the grantor did not yet hold any interest in those minerals at the time the option was executed.