Arndt v. Maki

• Decision Date: 15 March 2012
• Docket Number: No. 20110191.,20110191.
• Parties: Richard A. ARNDT, Karen K. Arndt, TTT Minerals, LLC, Douglas Kinnoin, James S. Enge, Gerald D. Neset, Gary Craft, Marshall Craft, Jane Craft, Brian E. Olson, Peggy Olson, George L. Baranek, Katherine A. Baranek, and William (W.R.) Everett, Plaintiffs, Appellees and Cross–Appellants, v. Angeline MAKI, Marily Bryant, Lillian (Gunderson) Jastrzebski, Caroline Sadle, Esther Maki, Doris Walter, Gloria Worley, Laura Erber, Lloyd Arndt, Jason Arndt, Defendants, Appellants and Cross–Appellees.
• Court: North Dakota Supreme Court

813 N.W.2d 564

2012 ND 55

Richard A. ARNDT, Karen K. Arndt, TTT Minerals, LLC, Douglas Kinnoin, James S. Enge, Gerald D. Neset, Gary Craft, Marshall Craft, Jane Craft, Brian E. Olson, Peggy Olson, George L. Baranek, Katherine A. Baranek, and William (W.R.) Everett, Plaintiffs, Appellees and Cross–Appellants,

v.Angeline MAKI, Marily Bryant, Lillian (Gunderson) Jastrzebski, Caroline Sadle, Esther Maki, Doris Walter, Gloria Worley, Laura Erber, Lloyd Arndt, Jason Arndt, Defendants, Appellants and Cross–Appellees.

No. 20110191.

Supreme Court of North Dakota.

March 15, 2012.

Collin Paul Dobrovolny (argued) and Jon William Backes (appeared), Minot, N.D., for plaintiffs, appellees and cross-appellants Karen Arndt, Richard Arndt, Jane Craft, and Marshall Craft.

Jordan Joseph Evert (argued) and Peter Haroldson Furuseth (on brief), Williston, N.D., for plaintiffs and appellees George Baranek, Katherine Baranek, Gary Craft, James Enge, Douglas Kinnoin, Gerald Neset, Brian Olson, Peggy Olson, and TTT Minerals.

Greg W. Hennessy, Williston, N.D., for defendants, appellants and cross-appellees.

SANDSTROM, Justice.

[¶ 1] Angeline Maki and other relatives of Richard Arndt (collectively “Maki defendants”) appeal from a judgment declaring that Arndt and others (collectively “Arndt plaintiffs”) are the owners of mineral interests underlying the Arndt family farm, and the Arndt plaintiffs cross-appeal from the part of the judgment denying their claim against the Maki defendants for attorney fees and costs for slandering title to the minerals. We conclude the district court properly granted summary judgment dismissing the Maki defendants' counterclaim for reformation of a 1973 contract for deed and a 1984 personal representative's deed and correctly quieted title to the minerals in the Arndt plaintiffs. We further conclude, however, genuine issues of material fact exist on the claim for attorney fees and costs for slandering title to the minerals. We affirm in part, reverse in part, and remand to the district court for further proceedings.

I

[¶ 2] This case involves a family dispute over the mineral rights underlying what the parties refer to as the Arndt family farm in Mountrail County. The Maki defendants are Richard Arndt's eight siblings and the two sons and heirs of his deceased brother. The Arndt plaintiffs are Richard Arndt, his wife, and individuals and a company to whom the Arndts granted mineral interests received by them under a 1984 personal representative's deed. The Maki defendants claim an interest in the disputed mineral acres under a 2007 personal representative's deed. The family farm was owned by Carl and Marie Arndt, who were the parents of Richard Arndt and his siblings.

[¶ 3] While Richard Arndt was serving in the United States Navy in 1967, he received a letter from his parents asking him to return home to take over the family farm. While home on leave, Richard Arndt agreed to do so if he were allowed to buy the farm. After his discharge from the Navy in 1968, Richard Arndt returned home and farmed with his father until May 1, 1973, when Carl Arndt died. Carl Arndt died intestate and the farm was titled in his name alone. Shortly after Carl Arndt's death, Marie Arndt and the ten children met with an attorney, now deceased, to discuss financial affairs related to Carl Arndt's death. The attorney informed them that because Carl Arndt died without a will, Marie Arndt was entitled to one-half of the estate and the other one-half of the estate would be divided equally between the ten children. Marie Arndt was named personal representative of Carl Arndt's estate, and the ten children agreed to renounce their interests in the farm through waivers of inheritance. The children understood that Marie Arndt was the sole owner of the farm and that she was free to dispose of the farm as she wished, and she informed the children that she intended to sell the farm to Richard Arndt.

[¶ 4] On May 23, 1973, Marie Arndt and Richard Arndt entered into a handwritten agreement, penned by Marie Arndt, memorializing the terms for the sale of the farm. The handwritten agreement stated, “The mineral rights that are on the place go with the place.” The attorney prepared a consistent contract for deed, Marie and Richard Arndt signed it on October 24, 1973, and the contract for deed was duly recorded in Mountrail County. The contract for deed conveying the farm to Richard Arndt contained no mineral reservation.

[¶ 5] Marie Arndt died intestate on November 12, 1975. Richard Arndt's sisters, Angeline Maki and Marily Bryant, were appointed co-personal representatives of Marie Arndt's estate and were also substituted as co-personal representatives of Carl Arndt's estate. Richard Arndt eventually paid off the contract for deed in 1984, and all proceeds were paid to Marie Arndt's heirs. On October 3, 1984, the final decree of distribution in the estate of Carl Arndt was entered in which the farm was distributed, without reservation, to Marie Arndt's estate. On October 4, 1984, a personal representative's deed signed by Angeline Maki and Marily Bryant as co-personal representatives of Marie Arndt's estate was duly recorded conveying the farm to Richard Arndt. This personal representative's deed also did not contain a mineral reservation.

[¶ 6] On March 29, 2007, Angeline Maki and Marily Bryant, in their capacities as co-personal representatives of the estates of Carl Arndt and Marie Arndt, prepared and recorded a second personal representative's deed, this time conveying the minerals underlying the Arndt family farm to all of the heirs of Carl and Marie Arndt then living. In September 2007, all of the Maki defendants recorded separate statements of claim asserting an interest in the minerals.

[¶ 7] In November 2008, the Arndt plaintiffs brought this quiet title action against the Maki defendants and sought attorney fees and costs under N.D.C.C. § 47–19.1–09 for slandering title to the minerals. The Maki defendants counterclaimed for “reformation of the mineral deed to Richard and of the Contract for Deed from which it arose.” They contended reformation was required for fraud or mistake because Marie Arndt had informed the children at the attorney's office following Carl Arndt's death that the minerals underlying the family farm would be divided equally among all ten children. The Arndt plaintiffs unsuccessfully moved for summary judgment on two occasions. The district court granted their third motion for summary judgment and dismissed the counterclaim for reformation. The court concluded the Maki defendants had presented insufficient evidence to support their reformation action and quieted title to the minerals in the Arndt plaintiffs. The court dismissed the Arndt's claim for attorney fees and costs for slandering title to the minerals, stating it was “ not persuaded that the Maki Defendants recorded the March 29, 2007, Personal Representative's Deed of Distribution for the purpose of slandering the title to the minerals underlying the Arndt Family Farm.”

[¶ 8] The district court had jurisdiction under N.D. Const. art. VI, § 8, and N.D.C.C. § 27–05–06. The Maki defendants' appeal and the Arndt plaintiffs' cross-appeals were timely under N.D.R.App.P. 4(a) and N.D. Sup.Ct. Admin. Order 20. This Court has jurisdiction under N.D. Const. art. VI, §§ 2 and 6, and N.D.C.C. § 28–27–01.

II

[¶ 9] The Maki defendants argue the district court erred in granting summary judgment dismissing their claim for reformation.

[¶ 10] Our standard of review for summary judgments is well-established:

Summary judgment is a procedural device for the prompt resolution of a controversy on the merits without a trial if there are no genuine issues of material fact or inferences that can reasonably be drawn from undisputed facts, or if the only issues to be resolved are questions of law. A party moving for summary judgment has the burden of showing there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. In determining whether summary judgment was appropriately granted, we must view the evidence in the light most favorable to the party opposing the motion, and that party will be given the benefit of all favorable inferences which can reasonably be drawn from the record. On appeal, this Court decides whether the information available to the district court precluded the existence of a genuine issue of material fact and entitled the moving party to judgment as a matter of law. Whether the district court properly granted summary judgment is a question of law which we review de novo on the entire record.

Saltsman v. Sharp, 2011 ND 172, ¶ 4, 803 N.W.2d 553 (quoting

Brown v. Montana–Dakota Utilities Co., 2011 ND 38, ¶ 3, 794 N.W.2d 741). Although the party seeking summary judgment has the burden to clearly demonstrate there is no genuine issue of material fact, the court must also consider the substantive evidentiary standard of proof when ruling on a motion for summary judgment. Heart River Partners v. Goetzfried, 2005 ND 149, ¶ 9, 703 N.W.2d 330. “ ‘In considering the substantive standard of proof, the court must consider whether the trier of fact “could reasonably find either that the plaintiff proved his case by the quality and quantity of evidence required by the governing law or that he did not.” ’ ” Citizens State Bank–Midwest v. Symington, 2010 ND 56, ¶ 18, 780 N.W.2d 676 (quoting Goetzfried, at ¶ 9).

[¶ 11] The statutory basis for reformation is found in N.D.C.C. § 32–04–17, which provides:

When, through fraud or mutual mistake of the parties, or a mistake of one party which the other at the time knew or suspected, a written contract does not truly express the intention of the parties, it may be revised on the application of a party aggrieved so as to express that intention so far as it can be done without prejudice to rights acquired by third persons in good faith and for value.

[¶ 12] “The party...