Chornuk v. Nelson

Decision Date22 December 2014
Docket NumberNo. 20140124.,20140124.
CourtNorth Dakota Supreme Court
PartiesHarry W. CHORNUK and Linda D. Chornuk, Plaintiffs and Appellees v. Craig NELSON and Julie Nelson, Defendants and Appellants.

Michael J. Maus (argued), and Mark C. Sherer (on brief), Dickinson, N.D., for plaintiffs and appellees.

Aaron R. Hartman (argued), Minneapolis, MN, and Jordon J. Evert (appeared), Williston, N.D., for defendants and appellants.

Opinion

CROTHERS, Justice.

[¶ 1] Craig and Julie Nelson appeal from a judgment quieting title in certain real property in Harry and Linda Chornuk and awarding the Chornuks damages for conversion, and from an amended judgment modifying the damage award. The Nelsons argue the district court erroneously found they did not purchase the property in good faith and erred in quieting title of the property in favor of the Chornuks. We affirm.

I

[¶ 2] The disputed property is located in McKenzie County and is described as a 1.667 acre tract in the northwest quarter and southwest quarter of section 17, township 150 north, range 90 west.

[¶ 3] In January 1986, Norman and Mildred Dahl conveyed the property to the Chornuks by warranty deed, but the deed was not recorded until June 24, 2010. On June 17, 2005, after Norman Dahl's death, Mildred Dahl conveyed the same property by warranty deed to the Nelsons as part of the conveyance of approximately 44.5 acres. The deed was recorded on July 5, 2005.

[¶ 4] In September 2010, the Chornuks sued the Nelsons to quiet title to the property and sought damages for claims of trespass and conversion. The Nelsons moved for summary judgment, arguing they were entitled to judgment as a matter of law and to have title quieted in their favor because they recorded their deed to the property more than five years before the Chornuks recorded their deed. The Chornuks opposed the motion, arguing a question of fact exists whether the Nelsons had constructive notice of the Chornuks' interest and whether the Nelsons were good-faith purchasers. The district court denied the Nelsons' motion, concluding summary judgment was not appropriate because a genuine issue of material fact existed.

[¶ 5] After a bench trial, the district court quieted title in favor of the Chornuks. The court found the Chornuks mowed the property three or four times per year, planted trees on the property, installed drip irrigation lines for the trees, installed flower boxes on the property and performed other general maintenance. The court found that the Chornuks' actions were sufficient to put a prudent person on notice someone else had an interest in the property and that the Nelsons were required to conduct further inquiry before purchasing the property from Mildred Dahl. The court found the Nelsons had constructive notice of the Chornuks' interest and were not good-faith purchasers. The court awarded the Chornuks $2,830 in damages for trees the Nelsons cut down on the property. A judgment was entered.

[¶ 6] The Nelsons moved for reconsideration, arguing the damage award was not supported by the evidence. The court granted the Nelsons' motion. After a hearing, the court ordered the damage award be reduced to $360 and entered an amended judgment.

II

[¶ 7] The Chornuks argue the Nelsons waived their right to appeal from the judgment because they voluntarily paid the damages awarded in the judgment.

[¶ 8] [A] party who voluntarily pays a judgment against him waives the right to appeal from the judgment.” State ex rel. Storbakken v. Scott's Elec., Inc., 2014 ND 97, ¶ 6, 846 N.W.2d 327 (quoting Ramsey Fin. Corp. v. Haugland, 2006 ND 167, ¶ 9, 719 N.W.2d 346 ). However, “payment or acquiescence under coercion or duress does not constitute a waiver.” Schwab v. Zajac, 2012 ND 239, ¶ 8, 823 N.W.2d 737 (quoting Haugland, at ¶ 8). We look at the facts and circumstances of each case to determine if the judgment was voluntarily paid, and “the party seeking dismissal of the appeal bears the burden of showing the judgment was paid voluntarily.” Schwab, at ¶ 8 (quoting Mr. G's Turtle Mountain Lodge, Inc. v. Roland Twp., 2002 ND 140, ¶ 13, 651 N.W.2d 625 ).

[¶ 9] After the trial, judgment was entered awarding the Chornuks $2,830 in damages. The Nelsons moved for reconsideration of the amount of the damages, and their motion was granted. Before a hearing on the motion was held, the Chornuks caused an execution of judgment to be filed, directing the sheriff to satisfy the judgment out of the Nelsons' personal property. The judgment was satisfied through this process, which cannot be considered “voluntary payment” by the Nelsons. See Twogood v. Wentz, 2001 ND 167, ¶ 20, 634 N.W.2d 514 (payment of cost judgment in the face of a sheriff's execution did not waive right to appeal). The Nelsons did not voluntarily pay the judgment and they did not waive their right to appeal.

III

[¶ 10] In an appeal from a bench trial, the district court's factual findings are reviewed under the clearly erroneous standard and conclusions of law are fully reviewable. C & C Plumbing and Heating, LLP v. Williams County,

2014 ND 128, ¶ 6, 848 N.W.2d 709. “A finding of fact is clearly erroneous if it is induced by an erroneous view of the law, if there is no evidence to support it, or if, after reviewing all the evidence, we are left with a definite and firm conviction a mistake has been made.” Id. (quoting Trosen v. Trosen, 2014 ND 7, ¶ 20, 841 N.W.2d 687 ). The trial court determines the witnesses' credibility and we will not second-guess the court's credibility determinations. C & C, at ¶ 6.

[¶ 11] The Nelsons argue the district court erred in quieting title to the property in the Chornuks. The Chornuks and the Nelsons purchased the disputed property from the Dahls. The Chornuks purchased the property in 1986, and the Nelsons purchased the property in 2005. Although the Chornuks purchased the property in 1986, they did not record the deed until 2010, five years after the Nelsons recorded their deed for the property. The Nelsons argue they acquired their interest in the property in good faith and for valuable consideration, the Chornuks did not record their deed until after the Nelsons purchased the property and recorded their deed, and therefore their interest is superior to the Chornuks' interest under N.D.C.C. § 47–19–41.

[¶ 12] “An unrecorded instrument is valid as between the parties thereto and those who have notice thereof.” N.D.C.C. § 47–19–46. “Every conveyance of real estate not recorded shall be void as against any subsequent purchaser in good faith, and for a valuable consideration....” N.D.C.C. § 47–19–41 (2010)1 . Although the Chornuks' deed had not been recorded when the Nelsons purchased the property, the district court was required to decide whether the Nelsons were good-faith purchasers or had notice of the Chornuks' interest in the property.

[¶ 13] The Nelsons argue the district court erroneously found they did not purchase the property in good faith. “Good faith” is “an honest intention to abstain from taking any unconscientious advantage of another even through the forms or technicalities of law, together with an absence of all information or belief of facts which would render the transaction unconscientious.” N.D.C.C. § 1–01–21. [A] good faith purchaser must acquire rights without actual or constructive notice of another's rights.” Farmers Union Oil Co. of Garrison v. Smetana, 2009 ND 74, ¶ 16, 764 N.W.2d 665 (quoting Diocese of Bismarck Trust v. Ramada, Inc., 553 N.W.2d 760, 768 (N.D.1996) ); see also Swanson v. Swanson, 2011 ND 74, ¶ 9, 796 N.W.2d 614. Actual notice is express information of a fact, N.D.C.C. § 1–01–23, and constructive notice is notice imputed by the law to a person who does not have actual notice, N.D.C.C. § 1–01–24. “Every person who has actual notice of circumstances sufficient to put a prudent person upon inquiry as to a particular fact and who omits to make such inquiry with reasonable diligence is deemed to have constructive notice of the fact itself.” N.D.C.C. § 1–01–25. A person who has actual notice of circumstances sufficient to put a prudent person upon inquiry, and who fails to make the requisite inquiry, “cannot claim the protection of a good-faith purchaser status” and “will be charged with constructive notice of all facts that such inquiry would have revealed.” Swanson, at ¶ 10.

[¶ 14] The issues of good faith and constructive notice require an examination of the information the purchaser possessed. Smetana, 2009 ND 74, ¶ 16, 764 N.W.2d 665. To have constructive notice, the information the person possesses “must be sufficient to assert the existence of an interest as a fact, which in turn gives rise to a duty to investigate.” Id. (quoting Diocese of Bismarck, 553 N.W.2d at 768 ). We have further explained:

“The information need not be so full and detailed as to communicate a complete description of the opposing party interest. It is sufficient if it asserts the existence of a right or interest as a fact.... It need not state all the particulars or impart complete knowledge. It is enough if he has reasonable ground to believe that a conflicting right exists as a fact.

Swanson, 2011 ND 74, ¶ 12, 796 N.W.2d 614 (quoting Nygaard v. Robinson, 341 N.W.2d 349, 356 (N.D.1983) ).

[¶ 15] Whether a party acted in good faith is a question of fact. Smetana, 2009 ND 74, ¶ 15, 764 N.W.2d 665. Generally, the question of whether a party had notice is also a question of fact. Erway v. Deck, 1999 ND 7, ¶ 11, 588 N.W.2d 862. A party's status as a good faith purchaser without notice of a competing interest is a mixed question of fact and law, and we have explained:

“The factual circumstances relating to events surrounding the transaction—the realities disclosed by the evidence as distinguished from their legal effect—constitute the findings of fact necessary to determine whether a party has attained the status of a good faith purchaser without notice. A court's ultimate determination that a party is not a good faith purchaser
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3 cases
  • Pegg v. Kohn
    • United States
    • United States State Supreme Court of North Dakota
    • April 2, 2015
    ...the witnesses' credibility and we will not second-guess the court's credibility determinations.” Chornuk v. Nelson, 2014 ND 238, ¶ 10, 857 N.W.2d 587.[¶ 9] The testimony of Pegg and Kohn was diametrically opposed. Kohn testified he did not agree to give Pegg an ownership interest in Kohn El......
  • Sterling Dev. Grp. Three, LLC v. Carlson
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    • February 12, 2015
    ...the evidence, we are left with a definite and firm conviction a mistake has been made. See, e.g., Chornuk v. Nelson, 2014 ND 238, ¶ 10, 857 N.W.2d 587. [¶ 8] The district court found “[b]oth the Sterling Three and Sterling Eight leases required Sterling to provide the janitorial service in ......
  • U.S. for Use & Benefit of Thomas Indus. Coatings v. W. Sur. Co.
    • United States
    • United States District Courts. 8th Circuit. United States District Court of North Dakota
    • February 7, 2020
    ...Dam project. "Generally, the question of whether a party had notice is . . . a question of fact." Chornuk v. Nelson, 2014 ND 238, ¶ 15, 857 N.W.2d 587. Admittedly, how TIC arrived at $2,244,817.46 for its total damages figure is unclear from the record. To declare as a matter of law, howeve......

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