Higgins v. Trauger
| Decision Date | 17 January 2003 |
| Docket Number | No. 20020133., No. 20020132 |
| Parties | Maria L. HIGGINS, Petitioner, Appellant and Cross-Appellee, v. Paul E. TRAUGER, County Auditor of Morton County, Respondent and Appellee. Steve Thilmony and Garry Strandemo, Plaintiffs, Appellees and Cross-Appellants, v. William Higgins; Sanitary Plumbing and Heating; Dakota Northwestern Bank, National Association, n/k/a Norwest Bank Bismarck, National Association; United Accounts, Inc.; B & D Supply, Inc. and all other persons unknown claiming any estate or interest in or Lien or encumbrance upon the property described in the Complaint, Defendants. |
| Court | North Dakota Supreme Court |
William C. Severin (on brief), and Susan Schmidt (argued), Severin, Ringsak & Morrow, Bismarck, for petitioner and appellant Maria L. Higgins.
Charles S. Miller, Jr., Fleck, Mather & Strutz, Bismarck, for respondent and appellee Paul E. Trauger.
James P. Rausch, Rausch Law Office, Bismarck, for plaintiffs and appellees Steve Thilmony and Garry Strandemo.
[¶ 1] Maria L. Higgins appealed from a judgment and amended judgment quieting title to Morton County property in William Higgins and Harry Reynolds as tenants in common, and dismissing her petition for writ of mandamus directing Morton County Auditor Paul E. Trauger to issue tax deeds to the property to her. Maria argues the trial court erred in ruling she and her husband, William, acted in collusion to divest Reynolds of his interest in the property. In their cross-appeal, Steve Thilmony and Garry Strandemo argue a prior judgment quieting title to the property in them should be reinstated because William did not appeal from that judgment. We affirm.
[¶ 2] These appeals follow our remand in Higgins v. Trauger, 2001 ND 149, 632 N.W.2d 463. The factual background of this controversy is detailed in that opinion and we need not repeat it here except to the extent necessary for an understanding of the parties' positions in this appeal. William and Reynolds were co-owners of Morton County property located by the "strip" between Bismarck and Mandan. Reynolds resided on the property, but William paid the taxes on the property until allowing them to go delinquent in 1994 and the auditor acquired the property through tax sales. In 1998, Maria Higgins purchased the tax sale certificates for the property. On March 22, 2000, the date the auditor had erroneously informed the parties was the last day to redeem, Reynolds, with the assistance of Thilmony and Strandemo, paid the treasurer the amount required to redeem. Reynolds then quitclaimed his interest to Thilmony and Strandemo.
[¶ 3] Maria sued the auditor, seeking a writ of mandamus compelling him to issue her tax deeds to the property because no one had redeemed by March 21, 2000, the actual last day to redeem. Thilmony and Strandemo sued to quiet title to the property, and the trial court consolidated the cases. The trial court granted summary judgment against Maria, ruling Reynolds had the right to rely on the auditor's representations. The court quieted title to the property in Thilmony and Strandemo and dismissed Maria's petition for writ of mandamus.
[¶ 4] In Higgins, 2001 ND 149, ¶ 19, 632 N.W.2d 463 (footnote omitted), we reversed, concluding "[t]he redemption period expired on March 21, 2000, and Reynolds's belated attempt to redeem on March 22 was too late as a matter of law." We also ruled, however, summary judgment was improperly granted on the claim of the auditor, and of Thilmony and Strandemo, that Maria's purchase of the tax sale certificates should be treated as a purchase or redemption under former N.D.C.C. § 57-24-18, by her husband, William.
We conclude the auditor's affidavit raises a genuine issue of material fact whether Maria and William Higgins entered into a collusive arrangement to avoid the prohibitions in N.D.C.C. § 57-24-18. If they did so, Maria Higgins's purchase of the tax sale certificates should be treated as a purchase, or redemption, by William Higgins, and William Higgins and Reynolds should be restored to their prior status as co-owners of the disputed property. If they did not enter into a collusive arrangement, a writ of mandamus should issue compelling Trauger, the Morton County Auditor, to issue Maria Higgins the tax deeds to the property.
[¶ 5] Attorney Bruce Bair, Maria, and the auditor testified at the evidentiary hearing on remand. The trial court ruled Maria and William acted in collusion to deprive Reynolds of his interest in the property.
[¶ 6] The court dismissed the petition for writ of mandamus and the quiet title action. These appeals followed.
[¶ 7] Maria argues the trial court erred in ruling she and her husband acted in collusion to divest Reynolds of his interest in the disputed property.
[¶ 8] In Higgins, 2001 ND 149, ¶ 22, 632 N.W.2d 463, we quoted Black's Law Dictionary 264 (6th ed.1990) in defining collusion as "`[a]n agreement between two or more persons to defraud a person of his rights by the forms of law, or to obtain an object forbidden by law.'" Collusion has also been defined as "a secret arrangement between two or more persons, whose interests are apparently conflicting, to make use of the forms and proceedings of law in order to defraud a third person, or to obtain that which justice would not give them." Span, Inc. v. Associated Int'l Ins. Co., 227 Cal.App.3d 463, 277 Cal.Rptr. 828, 839-40 (Cal.Ct.App.1991) (citation omitted).
[¶ 9] Collusion has been described as "the equivalent of conspiracy." Runyan v. Farmers' Bank, 210 Iowa 147, 230 N.W. 418, 421 (Iowa 1930). Proof of an actual agreement is not necessary, and it is sufficient to show that the parties, with knowledge that concerted action was contemplated and invited, gave their adherence to and participated in the collusive scheme. See First City Nat'l Bank v.
Brazosport Towing Co., 585 F.Supp. 115, 117 (S.D.Tex.1984). Compare State v. Gonzalez, 2000 ND 32, ¶ 17, 606 N.W.2d 873
(). Collusion does not require fraudulent conduct. See Dynamic Marine Consortium, S.A. v. LATINI, MV, 179 F.3d 278, 280 (5th Cir. 1999); Estate of Farish v. United States, 233 F.Supp. 220, 228 (S.D.Tex.1964).
[¶ 10] What constitutes collusion will differ with each fact situation. Span, Inc., 277 Cal.Rptr. at 840. The burden of proof on the issue of collusion rests with the party asserting that collusion has occurred. Estate of Farish, 233 F.Supp. at 228. Whether collusion has occurred is a finding of fact which this Court will not reverse on appeal unless it is clearly erroneous. Black v. Peterson, 442 N.W.2d 426, 430 (N.D.1989). 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. Moen v. Thomas, 2001 ND 95, ¶ 19, 627 N.W.2d 146. Because a state of mind is rarely proven directly and must usually be inferred from conduct and circumstances, evidentiary conflicts and factual questions about state of mind are properly for the trier of fact to decide and are not appropriate for appellate second guessing. See State v. Franck, 499 N.W.2d 108, 111 (N.D.1993)
.
[¶ 11] In this case, Bair was a friend and neighbor of Maria and William who occasionally performed legal services for them. He testified that, during the late 1980s and early 1990s, William had personally invested more than $43,000 in the disputed property through payments on a contract for deed, taxes and insurance. Maria admitted William and Reynolds had "disagreement[s]" over the property because Reynolds never paid any of the taxes, and William had earlier attempted to bring a partition action against Reynolds. Bair testified that when Maria and William approached him in 1997, "they were concerned about trying to recover their financial investment" in the property. Bair recommended that Maria "purchase the tax certificate if they were going to go that way" because, according to Bair, "I was concerned about mortgages, and liens, and that type of thing, and, of course, she had never, ever been involved in the real estate in any way, and she, I felt, would have a better chance of getting a clear title." Bair testified he advised Maria that the purchase of tax sales certificates "would be a good investment" for her and that if no one redeemed, she would acquire title to the premises and William and Reynolds would lose their interest in the property.
[¶ 12] Maria testified that she purchased the...
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