Mason v. Haakenson, 9869

• Decision Date: 25 March 1981
• Docket Number: No. 9869,9869
• Citation: 303 N.W.2d 557
• Parties: Richard E. MASON and Judith Mason, Plaintiffs and Appellees, v. Marlan HAAKENSON, Defendant and Appellant. Civ.
• Court: North Dakota Supreme Court

Page 557

303 N.W.2d 557

Richard E. MASON and Judith Mason, Plaintiffs and Appellees, v. Marlan HAAKENSON, Defendant and Appellant.

Civ. No. 9869.

Supreme Court of North Dakota.

March 25, 1981.

Pearce, Anderson & Durick, Bismarck, for plaintiffs and appellees; argued by B. Timothy Durick, Bismarck.

Baer & Asbridge, Bismarck, for defendant and appellant; argued by Darold A. Asbridge, Bismarck.

ERICKSTAD, Chief Justice.

This is an appeal by the defendant, Marlan Haakenson, from the judgment of the District Court of Burleigh County, dated September 9, 1980, ordering Haakenson to execute and record a proper release of the option he caused to be recorded against property of the plaintiffs, Richard E. Mason and Judith Mason (hereinafter the Masons), in the office of the Burleigh County Register of Deeds.

The Masons and Haakenson entered into an option agreement, dated September 22, 1979, under which Haakenson, for the sum of $50.00 was given an option to purchase certain property owned by the Masons for the sum of $120,000.00. Although the legal description of the property is lengthy and rather complex, the option agreement purported to involve approximately 2.39 acres. The option agreement expressly provided that time was of the essence and that Haakenson was entitled to exercise the option only until 12 o'clock noon on October 31, 1979. The option agreement also included the following specific provisions regarding the manner of exercising the option to purchase:

"This Option may be exercised at any time prior to the expiration hour and date recited herein by Marlin Haakenson by giving written notice to Richard E. Mason and Judith Mason, exercising said Option, and by the payment of the purchase price in full prior to said expiration. In the event the Option is exercised, Richard E. Mason and Judith Mason agree to convey the above-described property by Warranty Deed showing good and merchantable title in themselves, free and clear of all encumbrances as of the date of closing, and in any event, Marlin Haakenson shall not be obligated to make the payment required hereunder to exercise this Option unless and until he has had presented to him a current, up-to-date Abstract of Title showing good and marketable title in Richard E. Mason and Judith Mason free and clear of all encumbrances. In the event Marlin Haakenson should have an objection to title, said objections shall be set forth specifically, in writing, and Richard E. Mason and Judith Mason shall have a period of at least thirty (30) days in which to cure any defect in title, and after evidence that said defect has been cured has been presented to Marlin Haakenson, Haakenson shall have a period of five (5) days thereafter in which to make the required full payment. It is also provided herein, however, that in case there should be any delay on the part of Richard E. Mason and Judith Mason in perfecting the title to the above property for more than thirty (30) days after notice of the election of Marlin Haakenson hereof to purchase the said property, then and in that case, Marlin Haakenson, in his discretion, may forthwith cancel this Option and receive back the consideration he has paid herefor, or in his discretion may extend the time until said title has been perfected."

Upon examining the records in the office of the Register of Deeds, Haakenson's attorney determined that the Masons only owned approximately 1.6 acres plus a reversionary interest in .2 acres of property rather than owning the approximate 2.39 acres described in the option agreement. Haakenson's attorney, Norlyn E. Schulz, drafted a letter to the Masons on Haakenson's behalf, which was delivered to the Masons on October 31, 1979, and Haakenson asserts that his letter constituted an exercise by him of his option to purchase the Masons property. The Masons assert that Haakenson did not exercise his option to purchase by the October 31, 1979, letter, and they further assert that such letter constituted a mere counteroffer by Haakenson which they did not accept.

Subsequent to the foregoing events, Haakenson recorded the option agreement in the office of the Burleigh County Register of Deeds. On December 18, 1979, the Masons filed an action in the District Court of Burleigh County requesting the court to order Haakenson to execute a release of the recorded option agreement. Haakenson filed a counterclaim requesting the court to grant him specific performance of the option agreement. The district court determined that Haakenson had failed to exercise his option within the time period specified by...