Estate of Seidel v. Seidel, 011221 NDSC, 20200148

Docket Nº:20200148
Opinion Judge:TUFTE, JUSTICE
Party Name:Estate of Leroy E. Seidel, Plaintiff and Appellee v. James A. Seidel; Gravel Supply LLC; and Troy Seidel, Defendants and Appellants
Attorney:Charles L. Neff, Williston, N.D., for plaintiff and appellee. Andrew D. Cook, West Fargo, N.D., for defendants and appellants.
Judge Panel:Jon J. Jensen, C.J., Gerald W.VandeWalle, Daniel J. Crothers, Lisa Fair McEvers, Jerod E. Tufte
Case Date:January 12, 2021
Court:Supreme Court of North Dakota

2021 ND 6

Estate of Leroy E. Seidel, Plaintiff and Appellee

v.

James A. Seidel; Gravel Supply LLC; and Troy Seidel, Defendants and Appellants

No. 20200148

Supreme Court of North Dakota

January 12, 2021

Appeal from the District Court of Williams County, Northwest Judicial District, the Honorable Joshua B. Rustad, Judge.

Charles L. Neff, Williston, N.D., for plaintiff and appellee.

Andrew D. Cook, West Fargo, N.D., for defendants and appellants.

OPINION

TUFTE, JUSTICE

[¶1] James Seidel, Troy Seidel, and Gravel Supply LLC (Defendants) appeal from a judgment awarding the Estate of Leroy Seidel $68, 958.75 relating to the Defendants' sale of gravel from certain real property. The Defendants argue Leroy Seidel did not own any gravel interests in the property because he had conveyed his interests to James Seidel in a 2008 warranty deed. We reverse and remand, concluding Leroy Seidel did not own any gravel or other surface mineral interests in the subject property.

I

[¶2] Leroy Seidel and his brother James Seidel each owned one-half of the mineral interests, including gravel and other surface minerals, relating to certain real property in Sections 20, 21, 27, 28, 29, and 33, Township 156 North, Range 101 West, Williams County. The mineral interests were conveyed to them through mineral deeds by their mother, Hilda Seidel. In 2003, by contract for deed, Hilda Seidel agreed to convey her remaining interest in the property to James Seidel.

[¶3] In 2006, Leroy Seidel sued James Seidel, alleging James Seidel had exerted undue influence over Hilda Seidel in relation to the 2003 contract for deed. The parties executed a release of claims to settle the case in December 2007. As part of the release, James Seidel paid Leroy Seidel $167, 748.35, and Leroy Seidel executed a January 2008 warranty deed conveying his interest in the real property to James Seidel. The warranty deed did not include a reservation of minerals or gravel.

[¶4] In 2014, Leroy Seidel sued James Seidel, claiming the 2008 warranty deed to James Seidel involved the surface estate and did not include minerals such as oil and gas. The parties settled and executed a stipulation and cross-conveyance of mineral interests, stating each party owned one-half of the minerals under the property. The stipulation and cross-conveyance stated that surface minerals such as clay, scoria, and gravel were not included: The parties specifically agree that clay, scoria, and gravel are not included in this stipulation and cross-conveyance. Further, the parties specifically agree this stipulation and cross-conveyance in no way construes or interprets the Parties' rights, obligations or intentions in that certain Settlement Agreement entered into by and between the parties in Civil No. 06-C-0248 in District Court, Williams County, North Dakota.

[¶5] In October 2016, Leroy Seidel sued the Defendants for conversion and theft of property. Leroy Seidel alleged that he owned one-half of the gravel and other surface minerals relating to the property and that the Defendants sold gravel from the property without paying him for his share. Leroy Seidel sought money damages and a declaration that the 2008 warranty deed did not convey his surface minerals to James Seidel. Leroy Seidel's estate was substituted as Plaintiff after his death in 2017.

[¶6] The Defendants denied Leroy Seidel's allegations, claiming he did not own the gravel because he conveyed it to James Seidel in the 2008 warranty deed. The Defendants counterclaimed, alleging Leroy Seidel breached the covenants in the 2008 warranty deed and the conditions of the 2014 stipulation and cross-conveyance by suing the Defendants in the instant case. The Defendants sought damages, rescission of the stipulation and cross-conveyance, and attorney's fees.

[¶7] The Defendants moved for summary judgment, claiming the 2008 warranty deed unambiguously conveyed the gravel and other surface minerals to James Seidel. The district court denied the motion, concluding the deed was ambiguous because the release of claims executed before the deed was ambiguous.

[¶8] After a bench trial, the district court concluded the 2008 warranty deed did not convey Leroy Seidel's gravel interests to James Seidel. The court found that on the basis of other documents executed before the warranty deed, the parties did not intend to convey the gravel and Leroy Seidel owned one-half of the gravel interests. The court ordered the Defendants to pay $68, 958.75 to Seidel's estate for Leroy Seidel's share of the gravel sold from the property.

II

[¶9] The Defendants argue res judicata precludes Leroy Seidel's claim that he owns one-half of the gravel interests in the property. They claim Leroy Seidel could have and should have raised the issue of gravel ownership in his 2006 and 2014 lawsuits. They also assert the December 2007 release of claims executed by Leroy and James Seidel prohibited additional claims relating to the property.

[¶10] "Res judicata, or claim preclusion, prevents relitigation of claims that were raised, or could have been raised, in prior actions between the same parties or their privies." Fredericks v. Vogel Law Firm, 2020 ND 171, ¶ 10, 946 N.W.2d 507. Res judicata means a valid, final judgment from a court of competent jurisdiction is conclusive with regard to claims raised, or claims that could have been raised, as to the parties and their privies in subsequent actions. Kulczyk v. Tioga Ready Mix Co., 2017 ND 218, ¶ 10, 902 N.W.2d 485. Res judicata should not "be applied so rigidly as to defeat the ends of justice." Fettig v. Estate of Fettig, 2019 ND 261, ¶ 15, 934 N.W.2d 547. The applicability of res judicata is a question of law, fully reviewable on appeal. Fredericks, at ¶ 10.

[¶11] The district court concluded the release executed in December 2007 to settle the 2006 lawsuit did not cover the claims involved in this case: The Release of Claims signed to settle Case No. 06-C-0248 did not cover and did not release any claims which are the subject of...

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