Kuntz v. Kuntz

• Decision Date: 18 June 1999
• Docket Number: No. 980286,980286
• Citation: 595 N.W.2d 292,1999 ND 114
• Parties: William KUNTZ and Jeff Kuntz, Plaintiffs and Appellees, v. John KUNTZ, as Personal Representative of the estate of George Kuntz, deceased, Defendant and Appellant.
• Court: North Dakota Supreme Court

Page 292

595 N.W.2d 292

1999 ND 114

William KUNTZ and Jeff Kuntz, Plaintiffs and Appellees, v. John KUNTZ, as Personal Representative of the estate of

George Kuntz, deceased, Defendant and Appellant.

No. 980286.

Supreme Court of North Dakota.

June 18, 1999.

Michael S. McIntee, McIntee Law Firm, Towner, for plaintiffs and appellees.

J. Philip Johnson, Wold Johnson, P.C., Fargo, for defendant and appellant.

SANDSTROM, Justice.

¶1 Nephews sued their uncle to compel specific performance of an oral agreement for sale of the uncle's farmland and other farm assets. After the uncle died, the trial court ruled for the nephews. The personal representative of the uncle's estate appealed. We affirm, concluding the trial court did not err when it held the oral agreement was valid, specifically enforceable, and not the result of undue influence.

I

¶2 Brothers George and Bert Kuntz farmed and ranched near Towner. They separately owned land and cattle, but owned machinery together, and operated together, sharing income and expenses. Although George Kuntz never married or had children, Bert Kuntz married and had eight children. Bert Kuntz and his children routinely helped George Kuntz with farm and ranch work.

¶3 In June 1997, George Kuntz was diagnosed with terminal cancer and began discussing the sale of his farming assets. Bert Kuntz's sons, William (Bill) and Jeff Kuntz, ("nephews") offered, in writing, to purchase George Kuntz's land, cattle, and machinery. George Kuntz countered with a $5,000 increase in the price of the machinery. The nephews presented a revised written offer, which George Kuntz orally accepted. No written agreement was executed.

¶4 After George Kuntz's sister, Bernice Huber, began caring for him, she told the nephews she was canceling the sale. The nephews sued to complete the sale. When George Kuntz died, John Kuntz, Personal Representative of George Kuntz Estate was substituted as the defendant for trial.

¶5 The trial court found:

4. George gave Bill Kuntz [a nephew] a verbal agreement to the terms of the modified Purchase Agreement Proposal.

5. On June 21, 199, the parties met at the office of their tax consultant. At that time, the tax consultant advised that the terms were acceptable, but that the depreciation schedule for the personal property would have to be limited to approximately 7 years. He further indicated that the amount of the purchase price, the interest rate and the amount of the yearly payments was acceptable, but that the purchase price would have to be first applied to the purchase of the chattel property. After discussion, George Kuntz agreed to the terms of the Proposal as well as the suggested payment application by the tax consultant.

6. George Kuntz then began to have documents prepared to complete the sale, including the updating of abstracts.

7. Based upon George Kuntz's verbal agreement, [his nephews] rented additional pasture land for the cattle and began to operate the farm/ranch as if the purchase agreements had been executed.

8. Shortly thereafter, George Kuntz informed other non-family members that he had sold his farm to the Plaintiffs and that he had given them a good deal since he could not take it with him and knew he was selling it for less than market price to make sure that the Plaintiff could make it.

9. Attorney William Hartl had prepared the purchase agreements according to the Proposal, and had obtained George's signature. Before signing, Hartl discovered that he had forgotten to include a small parcel of land and needed to revise the documents.

....

11. Since the dates of June 15-16, 199, up to George's death, [his nephews] operated George's farm without any input or direction from him.

¶6 The trial court concluded George Kuntz and his nephews entered into a "verbal agreement" for the sale of George Kuntz's farm assets; the agreement was binding because the nephews "partially performed on the oral contract substantially to their detriment;" and "[t]he oral agreement as outline[d] on Plaintiff's Exhibit Number 1 and as further modified for the shorter payments schedules on the property other than the land, is valid and enforceable." The trial court ordered the personal representative to complete the sale. The personal representative appealed, contending the trial court erred in finding there was an oral agreement for the sale of George Kuntz's farming assets, or, if there was a contract, the court erred in not finding undue influence affecting George Kuntz's actions.

II

¶7 A contract requires parties capable of contracting, consent of the parties, a lawful object, and sufficient consideration. N.D.C.C. § 9-01-02. Parties' consent must be free, mutual, and communicated to each other. N.D.C.C. § 9-03-01. A flexible test of acceptance and mutual consent is appropriate when there is possession of property and partial performance. Stonewood Hotel Corp., Inc. v. Seven Seas, Inc., 452 N.W.2d 94, 95 (N.D.1990). "Intent and the existence of an oral contract are questions of fact." Ehrman v. Feist, 1997 ND 180, p 12, 568 N.W.2d 747.

¶8 The personal representative, relying on Bjornson v. Five Star Mfg. Co., 61 N.W.2d 913 (N.D.1953), argues "[i]f the parties intended to have a final written agreement, oral agreements are irrelevant." Bjornson, however, is limited to parties not intending to be bound until executing a written contract:

We think the letters of the plaintiff's attorney and of defendant's president affirmatively demonstrate that the negotiators intended that neither party should be bound until the final contract was executed. Since negotiations were abandoned before that contract was executed, there was no contract which can be made the basis of a cause of action.

Bjornson, 61 N.W.2d at 916.

¶9 Here, the trial court found an oral agreement. Ample evidence supports the finding George Kuntz orally agreed to the sale of his farm assets on terms proposed by his nephews, as modified by changes suggested by the tax consultant employed by the three parties to the agreement. The trial court's finding, "George gave [his nephew] Bill Kuntz a verbal agreement to the terms of the modified Purchase Agreement Proposal," is not clearly erroneous.

III

¶10 The trial court found part performance warranting enforcement of the parties' oral agreement. An agreement for the sale of real property, or "for the lending of money or the extension of credit in an aggregate amount of twenty-five thousand dollars or greater" is "invalid, unless the same or some note or memorandum thereof is in writing and subscribed by the party to be charged, or by his agent." N.D.C.C. § 9-06-04. An oral contract, however, may be taken out of the statute of frauds by part performance. Ehrman v. Feist, 1997 ND 180, p 12, 568 N.W.2d 747. "Part performance consistent only with the existence of an oral contract removes the contract from the statute of frauds." Wachter Dev., L.L.C. v. Gomke, 544 N.W.2d 127, 132 (N.D.1996).

¶11 Bert Kuntz testified George Kuntz did not "do any farming-ranching" after learning he had cancer. Violet Kuntz, Bert Kuntz's wife, testified she did not "ever see anyone other than [her] immediate family do any work on the George Kuntz farm after this June 21st meeting with Mr. Steinke." One of the nephews, Jeff Kuntz, testified he "took out a loan because I needed to get some pasture rented" after George Kuntz accepted the purchase offer. He testified he presented the purchase proposal to his lender to show he needed more land, and after receiving the loan he rented the additional land from Harry Anderson for $6,800. He also testified that, since mid-June 1997, "[w]e have started taking over the payments, such as medicine for the cattle, making sure the cattle get to and from pasture, whatever wasn't treated for, castration of cattle, and just pretty much maintain the farm and ranch life."

¶12 The other nephew, William Kuntz, testified he owned 1,300 acres of pasture which, before May or June 1997, he had been renting to his father and George Kuntz. He testified Attorney William Hartl had said "everything was prepared and done and that George had signed it," but he would have to add an 80-acre tract he had forgotten, and "as soon as he had that, he would have George sign the one prepared correctly and then we could sign it." He testified they "would give the down payment when the title opinions were prepared." He further testified that after George Kuntz told William Kuntz's mother where the abstracts were, she gave them to William Kuntz, who brought them to the abstractor's office. The estate paid the abstractor's bill. He testified that since the sale of the property in June 1997, the estate has not paid any expenses or "done anything that would be consistent with George or his estate operating the farm."

¶13 This evidence supports the trial court's finding, "[b]ased upon George Kuntz's verbal agreement, Bill and Jeff Kuntz rented additional pasture land for the cattle and began to operate the farm/ranch as if the purchase agreements had been executed." This finding supports the trial court's conclusion the parties' oral agreement was binding because the nephews "partially performed on the oral contract substantially to their detriment." There is evidence of "[p]art performance consistent only with the existence of oral contract," Wachter, 544 N.W.2d at 132, which "removes the contract from the statute of frauds," id.

IV

¶14 Under appropriate circumstances, specific performance of an obligation may be compelled. N.D.C.C. § 32-04-07. Under N.D.C.C. § 32-04-12(5), an obligation cannot be specifically enforced if its terms "are not sufficiently certain to make the precise act that is to be done clearly ascertainable." "Specific performance cannot be enforced against a party to a contract ... [i]f it is not as to that party just and reasonable." N.D.C.C. § 32-04-13(2). "Generally, an 'agreement to agree' is unenforceable because its terms are so...