Nelson v. Mattson

• Decision Date: 10 April 2018
• Docket Number: Nos. 20170286 & 20170287,s. 20170286 & 20170287
• Citation: 910 N.W.2d 171
• Parties: Linda D. NELSON, Jill E. Mattson, Jeffery C. Mattson and Joan Louise Mattson, Plaintiffs and Appellants v. Steven R. MATTSON; Joyleen A. Mattson; Steven R. Mattson and Joyleen A. Mattson as Trustees of the Steven R. Mattson Living Trust, dated April 12, 2012; Roald Mattson; Marilyn Mattson; Roald F. Mattson and Marilyn Mattson, Trustees of the Roald F. Mattson Living Trust, dated February 5, 2007; Defendants and Appellees and Crescent Point Energy U.S. Corp.; 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

910 N.W.2d 171

Linda D. NELSON, Jill E. Mattson, Jeffery C. Mattson and Joan Louise Mattson, Plaintiffs and Appellants

v.Steven R. MATTSON; Joyleen A. Mattson; Steven R. Mattson and Joyleen A. Mattson as Trustees of the Steven R. Mattson Living Trust, dated April 12, 2012; Roald Mattson; Marilyn Mattson; Roald F. Mattson and Marilyn Mattson, Trustees of the Roald F. Mattson Living Trust, dated February 5, 2007; Defendants and AppelleesandCrescent Point Energy U.S. Corp.; and all other persons unknown claiming any estate or interest in, or lien or encumbrance upon, the property described in the complaint, Defendants

Nos. 20170286 & 20170287

Supreme Court of North Dakota.

Filed April 10, 2018

Skiff R. Larson, Chandler, Arizona, for plaintiffs and appellants.

Richard P. Olson (argued) and Wanda L. Fischer (on brief), Minot, North Dakota, for defendants and appellees.

Tufte, Justice.

[¶ 1] Linda Nelson, Jill Mattson, Jeffrey Mattson, and Joan Louise Mattson appeal from the district court’s judgment quieting title to property in the Steven R. Mattson Living Trust and the Roald F. Mattson Living Trust (the "Trusts"), and awarding damages to Steven R. Mattson, the Steven R. Mattson Living Trust, and the Roald F. Mattson Living Trust (collectively, the "Mattsons"). Because the joint tenancy between Leif, Alf, and Roald Mattson was not severed prior to Leif Mattson’s death, the district court did not clearly err by quieting title to property in the Trusts. Further, the district court did not clearly err by awarding damages to the Trusts for the oil and gas lease payments under a theory of conversion. However, the district court erred by awarding damages to Steven Mattson for the amount he paid to Leif’s heirs for the purported interest they owned in the surface of the property because unjust enrichment was unavailable and the voluntary payment doctrine applies. We affirm in part and reverse in part.

I

[¶ 2] In 1973, Julia Alvstad deeded real estate in Williams County (the "Property") to her sons Leif, Alf, and Roald Mattson (the "Mattson Brothers") as joint tenants with the right of survivorship. The Mattson Brothers farmed and leased the Property together, equally sharing income and expenses. The business, RAL Farm, filed partnership tax returns.

[¶ 3] Leif Mattson died in 2001, leaving his estate to his children. Leif’s children received rental payments for a one-third interest in the Property. One of Leif’s children settled all claims, and the other four children, or their successors, are the Appellants here.

[¶ 4] The district court found that in 2003, Alf Mattson deeded his one-third interest in the Property to his nephew, Steven Mattson. In 2010, Leif’s heirs and successors sold to Steven Mattson by quitclaim deed a one-third interest, reserving mineral rights. Leif’s children continued to receive one-third of the payments under certain oil and gas leases of the Property.

[¶ 5] In 2012, Steven and Joyleen Mattson transferred Steven’s purported two-thirds ownership interest in the Property to the Steven R. Mattson Living Trust. In 2013, Roald and Marilyn Mattson transferred to the Roald F. Mattson Living Trust Roald’s purported one-third ownership interest in the Property. After having a law firm review the chain of title in the Property, Steven Mattson advised Leif’s children in 2013 that they had sold him land he already owned and that they were wrongfully receiving payment for minerals they did not own.

[¶ 6] Following a bench trial, the district court concluded that "at the death of Leif Mattson, his ? ownership in the subject property automatically transferred to Alf and Roald Mattson as surviving joint tenants, each with a ½ interest in the subject real property," and that "the sale of Alf Mattson’s ? interest to Steve Mattson severed the joint tenancy, with Steve and Roald Mattson each then owning a ½ interest as tenants in common." The court quieted title to the Property in Steve and Roald’s successors-in-interest, the Trusts. Further, the district court awarded Steven Mattson damages for the amount that he paid to Leif’s heirs for their purported one-third interest in the surface of the Property under unjust enrichment, and awarded the Trusts damages for the oil and gas lease payments made on the Property under the theories of unjust enrichment and conversion.

II

[¶ 7] The Appellants argue that the Mattson Brothers formed a partnership, RAL Farm. The district court found that the Mattson Brothers had formed a joint venture. Whether the Mattson Brothers’ relationship is categorized as a partnership or as a joint venture for this dispute does not affect the outcome here. See SPW Associates, LLP v. Anderson , 2006 ND 159, ¶ 8, 718 N.W.2d 580 (stating, "A joint venture is generally considered akin to a partnership, although more limited in scope and duration, and principles of partnership law apply to the joint venture relationship."). In SPW Associates , we sustained the district court’s determination that a supplier and builder were involved in a joint venture to build airplanes, and concluded that the supplied parts became joint venture property. Id. at ¶ 17. Thus, property can be owned by a joint venture, much as property can be owned by a partnership. See id. ; see also Kelly v. Lang , 62 N.W.2d 770, 774 (N.D. 1953) ; Gehlhar v. Konoske , 50 N.D. 256, 195 N.W. 558, 561 (1923). Because the rights of a joint venture are akin to a partnership in this context, we refer to RAL Farm as a partnership and the individuals involved in the business as partners for sake of simplicity.

III

[¶ 8] The Appellants argue that the Property was transferred to the partnership, severing the joint tenancy. Questions of fact are reviewed under the clearly erroneous standard. N.D.R.Civ.P. 52(a)(6). "A finding of fact is clearly erroneous if there is no evidence to support it, if the finding is induced by an erroneous view of the law, or if the reviewing court is left with a definite and firm conviction a mistake has been made." Laib v. Laib , 2008 ND 129, ¶ 10, 751 N.W.2d 228.

[¶ 9] Severance of a joint tenancy may be accomplished through alienation. Renz v. Renz , 256 N.W.2d 883, 886 (N.D. 1977). "It appears settled that joint tenants may contract with each other regarding income to be derived from jointly held property without thereby terminating the joint tenancy."

State Tax Comm’r v. Tuchscherer , 130 N.W.2d 608, 614 (N.D. 1964). "Property which is titled in the name of an individual partner may nevertheless be partnership property." Eckert v. Eckert , 425 N.W.2d 914, 915 (N.D. 1988). "The relevant inquiry is whether the partners intended that the property in question be partnership property or individual property." Id.

[¶ 10] The Appellants contend that the Mattson Brothers intended for the Property to be partnership property used in the RAL Farm business. They argue the Mattson Brothers’ intent is shown: (1) by their having listed the Property on the partnership tax returns as an asset of the partnership; (2) by their having used partnership funds to pay the Property taxes and expenses; (3) by each partner having had "the right to their share of profits and liability for their share of losses in accordance with their ownership interest in the partnership"; (4) by Roald Mattson and Alf Mattson having stated that the Property is partnership property after Leif Mattson’s death; and (5) by Roald and Alf having failed to challenge the transfer of Leif’s ownership interest in the partnership (rather than the Property) to his heirs.

[¶ 11] The partnership tax returns indicate that RAL Farm received rental income from the Property, but do not clearly indicate RAL Farm owned the Property. See Cyrus v. Cyrus , 242 Minn. 180, 64 N.W.2d 538, 543 (1954) (stating, "The fact that such realty is used for partnership purposes is not of itself, when standing alone, sufficient to establish an intent to contribute it to the partnership assets."); In re Mahoney's Estate , 233 Wis. 138, 288 N.W. 763, 765 (1939) (concluding that use of a partner’s individually-owned property, from which the partnership derived income, does not transform the property into an asset of the partnership). Although payment of the property taxes and expenses with partnership funds generally indicates the partners’ intention to treat the property as partnership property, it is not dispositive on the issue. See Cyrus , 64 N.W.2d at 543–44.

[¶ 12] The apparent division of profits and losses consistent with the Mattson Brothers’ partnership interest is similarly unenlightening as to ownership of the Property, because the same division would be achieved on the basis of ownership shares in the Property. The Mattson Brothers owned the Property in one-third shares. They were also equal partners in RAL Farm. Thus payment of rental income on the basis of ownership in the Property would yield the same result as payment according to partnership interest.

[¶ 13] Appellants’ argument that Roald and Alf stated the Property is partnership property relies on the testimony of Gail Mattern, a sister-in-law to Linda Nelson. Steven Mattson testified that he never believed RAL Farm owned the Property. "On appeal, this Court does not reweigh conflicts in the evidence, and we give due regard to the district court’s opportunity to judge the credibility of the witnesses." Fischer v. Berger , 2006 ND 48, ¶ 8, 710 N.W.2d 886. Because we will not reweigh the evidence presented at the district court, this argument must fail.

[¶ 14] Lastly, the Appellants argue that because Leif’s estate plan referred to an ownership interest in a partnership (rather than the Property) and Roald and Alf failed to challenge the subsequent transfer of Leif’s estate to Leif’s heirs, this shows the Mattson Brothers’ intention of transferring the Property to the partnership. The Appellants, however, do not state whether Alf and Roald were aware of the contents of Leif’s estate plan. Leif’s classification of his own ownership...