Deckert v. McCormick, 20140151.

• Decision Date: 18 December 2014
• Docket Number: No. 20140151.,20140151.
• Citation: 857 N.W.2d 355
• Parties: Dennis and Charlene DECKERT, Plaintiffs and Appellants v. Margaret L. McCORMICK and Judy Hertz, Defendants and Appellees.
• Court: North Dakota Supreme Court

857 N.W.2d 355

Dennis and Charlene DECKERT, Plaintiffs and Appellants
v.
Margaret L. McCORMICK and Judy Hertz, Defendants and Appellees.

No. 20140151.

Supreme Court of North Dakota.

Dec. 18, 2014.

857 N.W.2d 356

Zachary E. Pelham (argued) and Benjamin W. Keup (appeared), Bismarck, N.D., for plaintiffs and appellants.

Micheal A. Mulloy (argued) and James J. Coles (argued), Bismarck, N.D., for defendants and appellees.

Opinion

VANDE WALLE, Chief Justice.

¶ 1] Dennis and Charlene Deckert appealed from a summary judgment dismissing their action for a declaratory judgment and specific performance of an option to purchase certain Burleigh County real property and quieting title to the property in Margaret McCormick and Judy Hertz. Because we conclude there is no genuine issue of material fact that the Deckerts did not properly exercise the gratuitous option before it was revoked, we affirm the judgment.

I

[¶ 2] McCormick resides in Menoken and Charlene Deckert and Hertz are two of her five children. In 2006, McCormick owned 12 quarter sections of land in Burleigh County. After hiring an attorney to assist her in estate planning, McCormick transferred two quarter sections of land to each child through quit claim deeds, reserving in herself life estates. On March 7, 2006, McCormick granted an option to purchase the property at issue in this case

[857 N.W.2d 357

to the Deckerts. The option provided in relevant part:

For and in consideration of the sum of Ten Dollars ($10), and other good, valuable and legally sufficient consideration, in hand paid by Buyers to Owner, Margaret L. McCormick, does herein and hereby grant to Buyers, or the survivor thereof, an option to purchase the following described property pursuant to the terms and conditions of this Option:

[Property description]

This Option to purchase shall remain in full force and effect until December 31, 2015, at which time this Option shall fully finally expire, in its entirety. At any time during the option period, Buyers, or the survivor thereof, or in the event of the death of both Buyers, the issue of the Buyers, shall be authorized to purchase the above-described property, or any quarter section thereof, for a purchase price of $200 per acre. The conveyances shall be by way of Warranty Deed conveying good and marketable title to the subject premises, subject only to easements and restrictions and mineral reservations presently of record. As to physical condition, the real property shall be conveyed “AS IS, WITH ALL FAULTS”. To exercise the Option, Buyers shall tender the full purchase price, in cash, to Margaret L. McCormick, or her successors or assigns, at any time prior to December 31, 2015. Margaret L. McCormick, or her successors or assigns, as Owner, shall be responsible to deliver to Buyer abstracts of title to the subject premises, which abstracts shall be updated at Buyer's sole cost and expense. All real estate taxes shall be prorated to closing.

The Deckerts were not informed of this option until a week or two after its execution.

¶ 3] Also on March 7, 2006, McCormick conveyed the same property through a quit claim deed to Hertz, reserving to herself a life estate:

Grantor does hereby reserve, for the balance of her natural life, a life estate in and to the subject property which shall include the right to possess occupy and control the premises and to collect rents therefrom during Grantor [']s natural life, Grantor shall pay any and all costs and expenses necessary to maintain the premises and any and all real estate taxes assessed against the premises. The property shall not be subject to partition in the absence of a written consent by both Grantor and Grantee.

Subject to a Farm Lease between Grantor and Donald A. McCormick and Ronda McCormick, as tenants, which Lease expires on December 31, 2015. Subject to an Option to Purchase granted to Charlene Deckert and Dennis Deckert, which expires on December 31, 2015.

[¶ 4] During the summer of 2012, the Deckerts informed McCormick they wanted to exercise the option and requested the abstract for the property, but McCormick would not give it to them. In October 2012, the Deckerts' attorney wrote McCormick a letter informing her the Deckerts “have decided to exercise that option” and asking her to “forward the abstracts to me so that they may be updated prior to the closing.” The letter was not accompanied with a tender of the purchase price for the property. McCormick responded in a letter that “I have treated Charlene fairly,” since granting the option “there has been many life changes,” and “I am asking Charlene in good conscience to accept the 2 quarters I deeded to her and let Judy keep the 2 quarters I deeded to her. I will not furnish the abstracts. I will not sign off on my reserved life estate.” Following

[857 N.W.2d 358

additional correspondence between the Deckerts' attorney and McCormick, the Deckerts ultimately ordered a new abstract for the property and obtained financing for the purchase, but did not tender the purchase price to McCormick.

¶ 5] In February 2013, the Deckerts brought this action against McCormick and Hertz for a declaratory judgment and specific performance of the option to purchase the property. In July 2013, the Deckerts moved for summary judgment. The district court denied the motion on September 30, 2013, noting that “[n]o cash or other form of payment was tendered by Deckerts to McCormick for purchase of the property.” The court reasoned:

There is no dispute that Deckerts did not tender the full purchase price to McCormick. The plain language of the Option to Purchase requires the Deckerts to tender the purchase price in order to exercise the option. The purchase price was specified in the Option to Purchase as $200.00 per acre. Thus, Deckerts were required to tender $64,000.00 (320 acres x $200/acre) to McCormick in order to exercise the Option to Purchase. As there has been no tender of the full purchase price by Deckerts to McCormick, Deckerts have not exercised the Option to Purchase. If the Option to Purchase has not been exercised, there is nothing to enforce.

[¶ 6] Following the district court's ruling, McCormick sent the following letter to the Deckerts on October 1, 2013:

On March 7, 2006, I executed an option in favor of you for property legally described as [legal description]. On July 20, 2012, I indicated to you that ... I did not wish for you to exercise the option when I did not turn over the abstracts to you. Furthermore, on October 23, 2012, I sent a letter to your attorney stating that I will not furnish the abstracts to you. It was my intention in each instance to inform you that the option was withdrawn and could no longer be exercised by you.

To make the record clear without qualification, the March 7, 2006 option to purchase, recorded as Document Number 651722 at the Burleigh County Recorder's office, is revoked and withdrawn.

[¶ 7] McCormick and Hertz then moved for summary judgment dismissal of the Deckerts' action, arguing McCormick had unequivocally revoked the option before it was exercised. The Deckerts requested an extension of time to respond to the motion. The district court denied the Deckerts' request for additional time and granted the motion for summary judgment. The court ruled the option was given without consideration and therefore could be withdrawn at any time before acceptance. The court...