Hartman v. Grager
| Decision Date | 02 September 2021 |
| Docket Number | No. 20200205,20200205 |
| Citation | 964 N.W.2d 482 |
| Parties | Steve HARTMAN and Russell Hartman as Co-Personal Representatives of the Estate of Ray H. Hartman, Plaintiffs, Appellants, and Cross-Appellees v. Trent GRAGER, Defendant, Appellee, and Cross-Appellant |
| Court | North Dakota Supreme Court |
Shawn A. Grinolds (argued) and Randall J. Bakke (on brief), Bismarck, ND, for plaintiffs, appellants, and cross-appellees.
Tyler J. Malm (argued) and David J. Smith (on brief), Bismarck, ND, for defendant, appellee, and cross-appellant.
[¶1] Steve Hartman and Russell Hartman, as personal representatives of the estate of Ray Hartman (the "Estate"), appeal from an amended judgment entered after a bench trial. The Estate argues Ray Hartman lacked the capacity to contract, no valid contract for the sale of his farmstead and farmland existed, Trent Grager owes rent for the 2017 farming season, and Ray Hartman did not gift a tractor to Trent Grager. Trent Grager cross-appeals, arguing he is entitled to compensation for the Estate's wrongful occupation of the farm.
[¶2] We affirm in part, concluding the district court did not err in finding Ray Hartman was capable of contracting, the 2016 agreement was a valid contract for the sale of the farmstead and farmland, Trent Grager had no obligation to pay rent in 2017, and the tractor was gifted. We reverse in part, concluding the 2017 document did not supplement or alter the terms of the 2016 agreement, and Trent Grager is entitled to compensation for the Estate's wrongful occupation of the farm. We remand for the court to determine Trent Grager's damages for the Estate's wrongful occupation.
[¶3] Ray and Patricia Hartman, husband and wife, owned land in Wells County, North Dakota. They had five children: Patti Rae "Trish" Greenwood, Steve Hartman, Shelly Dahl, Russell Hartman, and Darcie Grager. Trent Grager is the grandson of Ray and Patricia Hartman and the son of Darcie and Todd Grager. Ray Hartman made a living personally farming their land until his retirement.
[¶4] In 2011, Ray Hartman began renting their farmland to Trent Grager, starting with 200 acres. From 2012 to 2017, he rented all of the farmland to him. Trent Grager was the only family member who rented and farmed Ray and Patricia Hartman's land after Ray Hartman retired. To aid in his farming endeavors, Ray Hartman purchased a John Deere tractor for Trent Grager to use for farming purposes. In the spring of 2012, Ray and Patricia Hartman began discussing with Trent Grager the sale of their land to him. Trent Grager estimated they discussed the sale 10 to 15 times over the years, and he had further conversations about the prospective purchase with his parents and his banker.
[¶5] Patricia Hartman died in March 2016. In August 2016, Ray Hartman sustained significant injuries in a car accident. He spent over three weeks in the hospital, and then was admitted to a nursing home, where he lived until his death in March 2017. While in the nursing home, Ray Hartman's children and his friend, Dale Ripplinger, noticed some decline in his cognitive abilities. Trent Grager, his wife, Katie Grager, and Ray Hartman's attorney, Paul Murphy, did not notice any cognitive impairment.
[¶6] While residing in the nursing home, Ray Hartman signed three documents evidencing a transfer of his farmstead and farmland to Trent Grager. First, in September or October 2016, Ray Hartman and Trent Grager signed an undated handwritten document providing (1) a breakdown of acreage numbers totaling 795; (2) "Farmstead = ~ 13 acres" written above "100,000"; and (3) "45 per acre" written above "35,775." Second, on November 29, 2016, during a visit to the nursing home, Trent Grager and Ray Hartman jointly drafted a document which reads, "I Ray Hartman sell Trent Grager the farmstead for $100,000 and all the land I own at $45, per acre" ("2016 agreement"). Ray Hartman wrote his name, the price for the farmstead ("100,000"), and the price per acre for the farmland ("45, per acre"). The document was signed and dated by both, noting Ray Hartman as "Seller" and Trent Grager as "Buyer." Third, in February 2017, Ray Hartman and Trent Grager signed identical but separate typewritten purchase agreements, purporting to sell the farmstead and farmland to Trent Grager ("2017 document"). Ray Hartman was independently represented by attorney Paul Murphy, who visited him twice at the nursing home, with Ray Hartman signing the 2017 document on the second visit. Trent Grager did not deliver his acceptance of the 2017 document to Ray Hartman prior to his death. No closing on the sale of the land occurred.
[¶7] After Ray Hartman's death, the family held a meeting and agreed to rent the farmland to Trent Grager for the 2017 growing season. Trent Grager farmed the land in 2017. The Estate rented the land to other individuals in 2018 and 2019.
[¶8] In July 2017, the Estate sued Trent Grager for unlawful possession of the tractor and the abstracts to the real property.1 Trent Grager counterclaimed, alleging that he is entitled to specific performance of the 2017 document, including conveyance of a deed for the real property, and that he owns the tractor. Trent Grager did not allege specific performance of either the first handwritten document or the 2016 agreement at this time.
[¶9] Both parties were granted leave by the district court to amend their pleadings. The Estate asserted the additional claims of exploitation of a vulnerable adult, rent for the 2017 growing season, and damages for loss of use of the tractor. Trent Grager sought to reform the 2017 document to correct certain scrivener's errors and alleged a breach of contract claim, in addition to his original counterclaims.
[¶10] The Estate moved for partial summary judgment to dismiss Trent Grager's counterclaims, arguing the 2017 document is unenforceable and Ray Hartman owned the tractor until his death. Trent Grager responded and presented the first handwritten document and the 2016 agreement in support of his argument.
[¶11] The district court granted the motion in part, and denied it in part. The court concluded the facts surrounding the purported gift of the tractor are disputed, rendering summary judgment inappropriate on that issue, and reserving it for trial. The court concluded the 2017 document was not a valid contract because there was no proof that Trent Grager delivered his acceptance of the agreement to Ray Hartman before his death. The court noted the first handwritten document and the 2016 agreement were not pled, and were raised for the first time in response to summary judgment. The court dismissed the claim of specific performance of the 2017 document.
[¶12] Following summary judgment, Trent Grager moved for leave to amend his counterclaim. The district court granted the motion in part, allowing Trent Grager to seek specific performance of the 2016 agreement.
[¶13] After a bench trial, the district court concluded Ray Hartman was mentally competent to contract, and that the 2016 agreement and 2017 document together constitute a valid contract for the sale of the real property. Specifically, the court found that offer and acceptance of the agreement occurred at the execution of the 2016 agreement and "the additional details were spelled out" in the 2017 document. The court reformed the 2017 document to correct the scrivener's errors, vacated its partial summary judgment to the extent it was inconsistent, and concluded the tractor was a gift from Ray Hartman to Trent Grager. The court denied Trent Grager's claim for damages for failure to close on the property, and the Estate's claims for reimbursement of the abstract update fees, exploitation of a vulnerable adult, damages for loss of the use of the tractor, and rent for the year of 2017. The Estate appealed, and Trent Grager cross-appealed.
[¶14] The Estate argues the district court erred in concluding Ray Hartman possessed sufficient mental capacity to contract for the sale of his farmstead and farmland. Our standard of review on capacity to contract is well-established:
A district court's finding on capacity, or lack of capacity, is a question of fact. We will not set aside a district court's finding of fact unless it is clearly erroneous. A finding of fact is clearly erroneous if it is induced by an erroneous view of the law, if no evidence supports it, or if, on the entire record, we are left with a definite and firm conviction a mistake has been made. In a bench trial, the district court determines credibility issues, which we will not second-guess on appeal. We do not reweigh evidence or reassess credibility, nor do we reexamine findings of fact made upon conflicting testimony. We give due regard to the trial court's opportunity to assess the credibility of the witnesses, and the court's choice between two permissible views of the evidence is not clearly erroneous. A court's findings of fact must reflect the basis of its decision and enable this Court to understand its reasoning. Findings of fact are adequate if we can discern the court's rationale for its decision.
Vig v. Swenson , 2017 ND 285, ¶ 14, 904 N.W.2d 489 (cleaned up).
[¶15] "All persons are capable of contracting except minors and persons of unsound mind." N.D.C.C. § 9-02-01. "A conveyance or other contract of a person of unsound mind, but not entirely without understanding, made before the person's incapacity has been determined judicially upon application for the appointment of a guardian is subject to rescission as provided by the laws of this state." N.D.C.C. § 14-01-02. "Before a court may set aside a transaction on the ground of mental incapacity, the party attacking the validity of the transaction has the burden to prove the grantor, at the time of the transaction, was so weak mentally as not to be able to comprehend and understand the nature and effect of the transaction." Vig , 2017 ND 285, ¶ 12, 904 N.W.2d 489. "Old age alone does not render a person incompetent, even...
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