Moen v. Thomas

Citation627 N.W.2d 146,2001 ND 95
Decision Date22 May 2001
Docket NumberNo. 20000169.,20000169.
CourtUnited States State Supreme Court of North Dakota
PartiesCarol Kay MOEN and LaRae A. Thomas, Co-Trustees of the Jay V. Thomas Family Trust, Plaintiffs and Appellees v. Laurie THOMAS, individually and as surviving spouse, heir and personal representative of Jerry J. Thomas, deceased, and his estate, and Kisten Thomas and Tessa Thomas, their minor children, by Laurie Thomas, their guardian, Defendants, Third-Party Plaintiffs and Appellants v. Fred C. Rathert and Neff Cresap Rathert Eiken & Irigoin, P.C., Third-Party Defendants.

John H. MacMaster, MacMaster Law Firm, Ltd., Williston, for plaintiffs and appellees.

Greg W. Hennessy, Hennessy Law Office, P.C., Williston, for defendants, third-party plaintiffs and appellants. NEUMANN, Justice.

[¶ 1] Laurie Thomas, Kisten Thomas, and Tessa Thomas have appealed from a judgment which quieted title in certain property in the Jay V. Thomas Family Trust, ordered the trust was entitled to exclusive possession of the property, and awarded damages for the use and occupation of the property. We conclude the trial court did not err in admitting testimony of an oral year-to-year lease and in finding the parties had a year-to-year lease which could be terminated at the end of a yearly term by the trustees. We therefore affirm the judgment.

I

[¶ 2] Laurie was married to Jerry Thomas and they had two daughters, Kisten and Tessa. Jerry's father, Jay, owned a ranch in Williams County. During the marriage, Jerry and Laurie lived on the Thomas family ranch and worked the ranch with Jay.

[¶ 3] Jay died on October 19, 1995. Under the terms of Jay's will, Jerry received the surface of the ranch headquarters and some additional ranch land. Under Article VII of the will, Jerry also received an option to purchase or lease other ranch land:

I give, devise and bequeath to my son, Jerry Jay Thomas, first option to buy at written estate appraised value all machinery and livestock owned by me at the time of my death, together with the first option on the surface of all rural real estate not otherwise disposed of in this will which is owned by me at such appraised value[.] [A]ll oil, gas and other minerals that I might own under the property sold shall be excepted and reserved to be distributed as hereinafter provided. This option shall include the right to purchase on a contract for deed over a seven year period and the right to use as a down payment on such contract the share received by Jerry Jay Thomas from the non-real estate property distributed to him under this will. I have checked the land values in the area including prices paid for land in recent years. The cropland which will be sold to my son Jerry on a contract for deed is highly erosive and susceptible to blowing. The pasture land is rough and sandy. It is my opinion that the sum of $70.00 per acre average for the cultivated and pasture land is a fair sum. I direct that this be the purchase price in the contract for deed. The contract shall bear interest at 6% per annum on unpaid balances. In the event that this option is not exercised within 180 days after my death, the property shall be sold at a public auction and proceeds distributed equally to my six children and my wife. All cattle and unpaid machinery balances and any balance due on the contract for deed executed pursuant to this article and any cattle owned at the time of my death not otherwise provided for and all unpaid balance on a contract for the sale of machinery to my son Jerry previously executed shall be distributed equally share and share alike to my wife and children, including my son, Jerry. It is my further desire that in the event that my son Jerry not exercise the option to purchase, that my personal representative lease the land reference [sic] in this article to him at a rental of $3.00 per acre. The lease to be for seven years and to contain an option to purchase the real estate described in this article or [sic] a contract over a fifteen (15) year period; the option shall be exercisable during such sever [sic] year lease term, sale price to be market value reduced by actual rental paid, interest to be Bank of North Dakota base rate minus 1 percent.

[¶ 4] The will was admitted to probate in November 1995, and Jay's daughter, Donna Sneva, was appointed personal representative. Jerry exercised his option under the will to purchase the machinery and livestock from the estate, but advised the other heirs at a December 1995 family meeting that he was declining the first option to purchase the land. Jerry orally stated, however, that he intended to exercise his right to lease the property. In late 1995 Jerry tendered, and the personal representative accepted, rent for 1996 at $3.00 per acre.1

[¶ 5] The family ultimately decided to place the property in trust to administer the surface and mineral interests of the estate. Attorney Fred Rathert, who had drafted Jay's will and represented the personal representative in probating the estate, drafted the trust agreement which was signed by the family members, including Jerry, on December 3, 1996. Article Three of the trust agreement provided:

The Settlors have transferred to this Trust real property consisting of farm and ranch lands located in Truax Township, Williams County, North Dakota. This property is now leased to Jerry J. Thomas, one of the Settlors. Jerry J. Thomas shall have the right and option to lease the property for agricultural purposes as provided in the Last Will and Testament of Jay V. Thomas, subject however to the rights of the other Settlors to enter and use the property for hiking, hunting or other limited recreational purposes. There shall be no access except to Settlors and their immediate families for camping, snowmobiling, motorcycling or other recreational vehicle use at any time. In negotiating and drafting the lease with Jerry J. Thomas, the Trustee shall consult with each Settlor and shall incorporate into such lease such terms and conditions as may be necessary to protect the rights of all parties. The rights to enter and use the property described in this paragraph shall be personal to the Settlors and their immediate families and limited number of guests.

Jay's daughters, LaRae Thomas and Carol Moen, were named co-trustees of the trust.

[¶ 6] Although it was originally contemplated Rathert would draft a written lease between Jerry and the trust, one of the co-trustees advised the office staff at Rathert's firm that the family would prepare their own lease with Jerry. LaRae Thomas subsequently confirmed this by delivering to Rathert's office a handwritten note stating: "It is Carol's and my intention to draw up our own lease agreement following terms stated w/in the Will." In compliance with these instructions Rathert did not draft a written lease, and no written agreement between Jerry and the trust was ever executed. LaRae Thomas, Carol Moen, and Donna Sneva testified that Jerry told the family he did not want to be bound to a seven-year lease, but preferred to continue renting the property on an oral year-to-year lease. They testified it was at Jerry's request that no written seven-year lease was executed, and the family agreed to an oral year-to-year lease. In late 1996 Jerry tendered rent for 1997 to the trustees.

[¶ 7] Jerry died in a ranching accident on May 12, 1997. Laurie continued in possession of the property, and discussed with the trustees her desire to rent some of the property. In the fall of 1997 the trustees informed Laurie they would not lease the land to her in 1998. In December 1997 Laurie tendered a check for rent for 1998 to the trustees. They returned the check, notifying her in an accompanying letter that she did not have a valid lease for 1998.

[¶ 8] When Laurie remained in possession, the trustees brought this action against Laurie, Kisten, and Tessa (hereafter collectively "Laurie") to quiet title to the property, to recover possession, and seeking damages for the value of use and possession of the property after December 31, 1997. Laurie answered and counterclaimed, alleging the seven-year lease and option to purchase under the will was in effect and survived Jerry's death. Laurie also alleged fraud and breach of fiduciary duty by the trustees.2

[¶ 9] Following a bench trial, the trial court found Jerry had a year-to-year lease which terminated at the end of 1997. The court quieted title in favor of the trust, ordered possession of the land be turned over to the trustees, and awarded damages of $19,000 for use and occupation of the property. The court also dismissed the counterclaim. Laurie appealed from the judgment.

II

[¶ 10] Laurie argues the trial court erred in allowing Donna Sneva, LaRae Thomas, and Carol Moen to testify that Jerry stated to them and other family members he did not want to be bound to a seven-year lease and that, at his request, they agreed to an oral year-to-year lease. Laurie asserts this testimony was hearsay and should not have been admitted.

[¶ 11] Rule 801(c), N.D.R.Ev., defines hearsay as "a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted." If an out-of-court statement is not offered to prove its truth, it is not hearsay. Ehrlich v. Backes, 477 N.W.2d 211, 214 (N.D.1991); State v. Welch, 426 N.W.2d 550, 555 (N.D.1988). A statement offered to prove it was made is not hearsay. Ehrlich, at 214; Welch, at 555.

[¶ 12] We have held that statements offered to prove an oral contract existed are not hearsay, because they are not offered to prove the truth of the matter asserted. See Towne v. Dinius, 1997 ND 125, ¶ 13, 565 N.W.2d 762

; In re Estate of Starcher, 447 N.W.2d 293, 297 (N.D.1989); In re Estate of Raketti, 340 N.W.2d 894, 899-901 (N.D.1983). Statements about the terms of, or assent to, an oral contract fall within the category of non-hearsay designated as "verbal acts" or ...

To continue reading

Request your trial
25 cases
  • Serv. Oil, Inc. v. Gjestvang
    • United States
    • United States State Supreme Court of North Dakota
    • March 30, 2015
    ...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. ‘In a bench trial, the trial court is “the determiner of credibility issues and we do not second-guess the trial......
  • Markgraf v. Welker
    • United States
    • United States State Supreme Court of North Dakota
    • December 31, 2015
    ...to prove the existence of an oral contract or assent to a contract are "verbal acts" or "verbal conduct" and are not hearsay. Moen v. Thomas, 2001 ND 95, ¶ 12, 627 N.W.2d 146. A statement offered to prove the statement was made is not hearsay because it is not offered to prove the truth of ......
  • Four Season's Healthcare Ctr., Inc. v. Linderkamp, s. 20120432
    • United States
    • United States State Supreme Court of North Dakota
    • September 4, 2013
    ...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. In a bench trial, the district court determines credibility issues and we do not second-guess those credibility ......
  • Moen v. Thomas
    • United States
    • United States State Supreme Court of North Dakota
    • June 8, 2001
    ...Laurie filed a separate appeal from the judgment in favor of the trust in the quiet title action, and we affirmed the judgment. See Moen v. Thomas, 2001 ND 95. 2. Our prior cases have indicated a plaintiff in a legal malpractice case must establish the existence of an attorney-client relati......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT