Ehrman v. Feist

• Decision Date: 10 September 1997
• Docket Number: No. 960392,960392
• Citation: 1997 ND 180,568 N.W.2d 747
• Parties: Freida A. EHRMAN, Plaintiff and Appellant, v. Bruce FEIST, Defendant, Third-Party Plaintiff and Appellee, v. Roger L. EHRMAN, Ramona Thingvold, and Janice Haugen, Third-Party Defendants and Appellants. Civil
• Court: North Dakota Supreme Court

Page 747

568 N.W.2d 747

1997 ND 180

Freida A. EHRMAN, Plaintiff and Appellant, v. Bruce FEIST, Defendant, Third-Party Plaintiff and Appellee, v. Roger L. EHRMAN, Ramona Thingvold, and Janice Haugen,

Third-Party Defendants and Appellants.

Civil No. 960392.

Supreme Court of North Dakota.

Sept. 10, 1997.

Michael Ward (argued), of Eaton, Van de Streek & Ward, Minot, for plaintiff and appellant.

David J. Hogue (argued), of Pringle & Herigstad, PC, Minot, for defendant and appellee.

NEUMANN, Justice.

¶1 Freida A. Ehrman appealed a January 17, 1997, district court memorandum opinion ¹ entered in her eviction action against Bruce Feist. We reverse the award of attorney fees, affirm the remainder of the judgment, and remand for entry of an amended judgment.

¶2 Hoping to begin a dairy operation, Feist rented a farmhouse, buildings, and pasture from Ehrman in 1991. On August 12, 1993, Ehrman and Feist executed a lease, providing in part:

"THIS AGREEMENT, made in duplicate, this 12th day of August, 1993, by and between * *BRUCE FEIST and ANNA FEIST* *, husband and wife, ..., hereinafter referred to as LESSEES, and * *FREIDA A. EHRMAN* *, ..., owner of the real estate herein described, ..., hereinafter referred to as LESSOR.

* * * * * *

"I. TERM

"The term of this Lease shall be for a period of seven (7) years, commencing on December 1, 1993 and terminating on December 1, 2000, subject to renegotiation for a renewal term by the Parties at said time, in writing.

* * * * * *

"III. RENT

"The LESSEES covenant and agree to pay cash rent for acres planted to corn, seeded hay acres and acres taken out of tillage production, the amount determined, annually, by the County Extension Office....

"The remainder of the land not included in the cash rent acreage shall be farmed on a share basis, one-half share (50-50) to each for the first three (3) years of the seven (7) year term. At the end of the three year period, a cash rent will be negotiated on all land except that seeded into corn or hay. The LESSOR agrees to pay one-half of the cost, annually, for the following: seed, fertilizer, tillage and combining at the rate commonly used in the vicinity of location of the premises, for and during the three year term. In the event the land is leased on a cash rent basis by negotiations, such expenses rest with the tenant.

* * * * * *

"V. HAY MEADOWS

"The LESSEES agree to cut and preserve all hay produced on land normally devoted to hay meadow (wild hay), on a share basis of two-thirds to LESSEES and one-third to LESSOR, and to pay LESSOR the market value for the one-third share, annually, on or before November 1st of each year of the term of this Lease.

* * * * * *

"X. GENERAL TERMS

"The Parties further agree as follows:

"a. That in the event the LESSEES become the purchasers of the premises described under negotiated terms and prices acceptable to the LESSOR, and if the LESSEES have placed improvements on the premises, such as, new fencing, addition to buildings, permanent improvements to the residence, corrals, the value of such improvements shall not be a factor in determining the reasonable sale price for the premises.

* * * * * *

"2. Provided, further, that if the LESSOR sells the premises to a third party or parties, other than the LESSEES, the LESSEES shall be paid the undepreciated value of any improvements made to said premises during the term of this Lease, and such payment shall be made to the LESSEES promptly upon sale of the premises.

"XI. PRIOR RIGHT TO PURCHASE

"The LESSOR agrees and hereby does grant to the LESSEES, the pre-emptive right to purchase the land upon negotiated terms agreeable to both parties; that in the event of a sale at any time during the term of this Lease, the Lease may be terminated as of the date of such sale to the LESSEES."

¶3 Before executing the written lease, Feist made improvements to the property, such as repairing fences, gates and buildings. After executing the written lease, Feist made major improvements to the property, such as replacing the floor in the barn and erecting a sixty-foot addition to the barn.

¶4 Ehrman sued to evict Feist from the premises, alleging, among other things, that Feist had failed to pay rent and had committed waste. Feist answered the complaint and counterclaimed, alleging Ehrman had represented she owned the land but had only a life estate, that Ehrman had represented Feist would be able to buy the farm at the end of the lease term for a reasonable amount, and that in reliance on those representations, Feist had made improvements for which he was entitled to compensation. Feist filed a third-party complaint against Roger L. Ehrman, Ramona Thingvold, and Janice Haugen, Freida Ehrman's children, to clarify title to the property, alleging Ehrman had conveyed the property to them in 1987, reserving only a life estate. By stipulation of the parties, the claims were tried together in one bench trial.

¶5 On July 12, 1996, the trial court issued partial findings of fact, conclusions of law, and order for judgment. The court declared Ehrman owned a life estate in the land, with the remainder interest owned by her children. The court found Ehrman failed to establish Feist had committed waste, and also found the lease unambiguously provided for a term of seven years. The court ordered dismissal of Ehrman's eviction complaint.

¶6 On October 29, 1996, the trial court issued a memorandum opinion determining, among other things: (1) "Prior to the Lease, the parties had mutually agreed to a rental of the buildings and pasture for $265.00 per month"; (2) Under the lease, there were "116 acres subject to the cash rent," and "$25 per acre is a reasonable amount" for 1994 through 1996; (3) The lease covered 268 acres on a crop share basis under the provision involving any of the land not included in the cash rent acreage; (4) Bruce owed Freida $14,095 and Freida owed Bruce $5,896.07, with Freida's 1996 share-basis costs and Bruce's 1996 hay meadow payments to be determined later; (5) "[T]he Court does not have sufficient and competent evidence to assess [Feist's] labor costs to the capital improvements"; (6) $65,786.66 was "attributable as costs associated with the capital improvements to the barn"; (7) Ehrman was "responsible for the costs of repairing or replacing the furnace in the house"; (8) "As to the water well, both parties will be responsible for one-half of the cost"; (9) "Freida and Bruce must have contemplated the possible sale of the premises"; (10) In the first paragraph of the lease "Freida holds herself out as the owner"; (11) "Freida owned only a life estate in the property"; (12) "[A]t least by August 1990, Freida had knowledge of her type of ownership"; (13) "The Court does not believe it was the obligation of Bruce to investigate the actual ownership at the time of the Lease signing, since the consummation of a possible sale was to occur at a later time"; (14) "Freida did not attempt anything to clarify the ownership, and Bruce entered into the rental situation and possible sale of the premises with the understanding Freida had the legal right to do so"; (15) "Freida misled Bruce with material assertions in the agreement. Consequently, it is understandable to the Court that Bruce would begin to make business plans and decisions relative to the legal contract he held in his hand"; (16) Under NDCC 32-04-12, "the Court cannot force the complete sale of the property" because "Freida does not have the power to sell the remaindermen's interests"; (17) "[T]o resolve the dispute over the possible sale of the property and recovery of the barn capital improvements, the Court shall order the following:

"All of the applicable farmland in the Lease and all of the buildings and appurtenances thereto, including improvements, shall be appraised by a licensed appraiser ... on or before December 31, 1996.... The Court then orders two (2) options:

"1. The first shall be sale of the property as a whole between Freida together with the third-party defendants and Bruce for the appraised value. Bruce shall receive credit for the separate appraisal for the barn improvements. The sale shall be completed within 60 days of the completed appraisals. This option would require the third-party defendants to give their consent ... on or before December 31, 1996.

"2. The second option, if the third-party defendants do not provide their consent or the sale fails for other reasons, shall grant Bruce a judgment against Freida for the amount of the appraised value of the barn capital improvements. The Lease shall continue for the remaining four (4) year period on a cash basis only. It appears to the Court a $12,000 annual rent is reasonable for the farmland and farmstead and buildings to be paid in two installments of April 1 and November 1 of each year. If Freida and Bruce agree, the money judgment may be applied over the four (4) year period to the annual rent at a rate of 6% per annum. Additionally, since the Court found Freida had entered the original Lease with misleading information, the Court shall award in this option $10,000 in attorneys' fees and costs against Freida. All other terms and conditions of the Lease shall remain in effect."

¶7 After receiving a report on the expenses left undetermined in its memorandum opinion of October 26, 1996, the district court, on January 13, 1997, ordered:

"To provide Bruce Feist for the recovery of his capital improvements and his costs and attorney's fees, the Court orders a recovery against Frieda Ehrman in the amount of $75,786.66. This recovery shall be reduced by $2,308.15, as identified in the letter of David Hogue, dated November 19, 1996, for the net amount which Bruce Feist owes Frieda Ehrman for the net expenses due her under the Lease, after considering the amounts owed to Frieda Ehrman for crop share expenses and the amount owed Frieda Ehrman by Bruce Feist for rent. Therefore, the Court orders the Clerk to...