Pifer v. McDermott

• Decision Date: 29 August 2013
• Docket Number: No. 20130027.,20130027.
• Citation: 836 N.W.2d 432,2013 ND 153
• Parties: Kevin PIFER, Plaintiff and Appellee v. Barbara McDERMOTT, Defendant and Appellant.
• Court: North Dakota Supreme Court

836 N.W.2d 432

2013 ND 153

Kevin PIFER, Plaintiff and Appellee

v.Barbara McDERMOTT, Defendant and Appellant.

No. 20130027.

Supreme Court of North Dakota.

Aug. 29, 2013.

Appeal from the District Court of Grand Forks County, Northeast Central Judicial District, the Honorable Lawrence E. Jahnke, Judge.

Roger J. Minch, Fargo, N.D., for plaintiff and appellee.

DeWayne A. Johnston (argued) and Jacey L. Johnston (appeared), Grand Forks, N.D., for defendant and appellant.

CROTHERS, Justice.

[¶ 1] Barbara McDermott appeals from a judgment entered on a jury verdict awarding Kevin Pifer $80,957.07 in damages for unlawful interference with business, and from several other orders issued by the district court in connection with these proceedings. We conclude the court did not err in ruling as a matter of law that the purchase option given to Pifer by her mother, Dorothy Bevan, was a valid and enforceable gift. We also conclude the interference with business claim was properly presented to the jury, the evidence supports the jury verdict and the court did not abuse its discretion in its related rulings and orders. We affirm.

I

[¶ 2] Pifer, who lived in Fargo, and Bevan, who lived in Larimore, were distant relatives. In January 2001, Bevan was in her mid–80s and executed a durable power of attorney in favor of Pifer. Pifer assisted Bevan with managing her farmland and with performing other miscellaneous tasks at her home. On February 16, 2004, Bevan executed a “PURCHASE OPTION” relating to two quarter sections of Grand Forks County agricultural property:

“DOROTHY BEVAN gives KEVIN PIFER an exclusive option to purchase the described property for the sum of $107,569.00.

“This option may be exercised by KEVIN PIFER at any time within two years following OWNER's death. This does not preclude OWNER from selling the property to KEVIN PIFER during OWNER's lifetime. The option shall automatically expire after two years following OWNER's death, unless KEVIN PIFER shall file with the County Recorder within such two-year period, notice of his intent to exercise this option.

“Conveyance shall be by warranty deed, or deed of personal representative, if applicable.

“This agreement is binding upon the parties, their heirs and estates, and successors.”

The purchase option price was less than the fair market value of the property at that time. Bevan's attorney drafted the agreement. Pifer recorded the purchase option in Grand Forks County on February 18, 2004.

[¶ 3] Bevan suffered a “slight stroke” in July 2008. McDermott visited Bevan shortly thereafter. This was McDermott's third visit with her mother in North Dakota since McDermott left the family home in 1971. McDermott returned to North Dakota in October 2008 and took Bevan to an attorney who prepared a power of attorney in favor of McDermott. Bevan executed the document, McDermott removed Bevan from a nursing facility in Larimore and McDermott took Bevan to Kentucky to live with her.

[¶ 4] On October 22, 2009, Bevan executed a warranty deed creating a joint tenancy with the right of survivorship with McDermott in the property covered by the purchase option. This warranty deed was recorded in Grand Forks County on December 22, 2009. Bevan died in Kentucky on June 24, 2010, at the age of 95. McDermott is Bevan's sole surviving heir.

[¶ 5] On July 27, 2010, Pifer recorded in Grand Forks County a notice of intent to exercise the purchase option. On July 28, 2010, an affidavit of survivorship was recorded indicating McDermott was the sole surviving joint tenant of the property. On September 8, 2010, Pifer's attorney sent a letter to McDermott's attorney along with a cashier's check for $107,569 to exercise the option. McDermott refused to honor the option and returned the check.

[¶ 6] In September 2010, Pifer brought this action against McDermott seeking declaratory relief, specific performance of the option and damages for intentional interference with economic advantage. McDermott counterclaimed, alleging the purchase option was void for lack of consideration or voidable because its terms were unconscionable.She also claimed Pifer, acting through the power of attorney, obtained the option through undue influence, coercion and fraud. McDermott moved for summary judgment, arguing the option was invalid. Pifer also moved for summary judgment, arguing the option was valid and enforceable. The district court agreed with Pifer and entered a partial summary judgment ordering McDermott to comply with the purchase option agreement. Pifer's claim for damages for interference with economic advantage remained pending a jury trial, and the court entered a N.D.R.Civ.P. 54(b) order for purposes of appeal. In Pifer v. McDermott, 2012 ND 90, ¶ 1, 816 N.W.2d 88, we dismissed McDermott's appeal from the partial summary judgment, concluding the court abused its discretion in directing entry of a final judgment under N.D.R.Civ.P. 54(b).

[¶ 7] After we issued our decision, the district court granted a temporary injunction on May 25, 2012, enjoining McDermott from farming the property during the 2012 crop year unless she deposited with the court $27,300 she was to receive under a cash rent lease of the property. She deposited the proceeds from the lease agreement with the court. Following a jury trial in November 2012, the jury found in favor of Pifer on his tort claim and awarded him $80,957.07 in damages. On December 31, 2012, the court continued the May 2012 temporary injunction enjoining McDermott from farming the property. The court allowed Pifer to cash rent the property for the 2013 crop year but required that he deposit the proceeds with the court. Pifer deposited with the court the $48,855 in proceeds from the lease. On January 17, 2013, the court denied McDermott's motion for judgment notwithstanding the jury verdict under N.D.R.Civ.P. 50 and granted her motion for a stay pending appeal.

II

[¶ 8] McDermott argues the district court erred in granting partial summary judgment ruling the purchase option was valid and enforceable as a matter of law.

[¶ 9] Our standard for reviewing summary judgments is well-established:

“Summary judgment is a procedural device used to promptly resolve a controversy on the merits without a trial if either party is entitled to judgment as a matter of law and the material facts are undisputed or if resolving the disputed facts would not alter the result. “ ‘Summary judgment is inappropriate if neither party is entitled to judgment as a matter of law or if reasonable differences of opinion exist as to the inferences to be drawn from the undisputed facts.’ ” Whether a district court has properly granted a motion for summary judgment is a question of law, which this Court reviews de novo on the record.

“When we review a district court's decision on a motion for summary judgment, we view the evidence in a light most favorable to the party opposing the motion and give the opposing party all favorable inferences. In determining whether summary judgment is appropriate, the court may examine the pleadings, depositions, admissions, affidavits, interrogatories, and inferences to be drawn from the evidence. The moving party must show there are no genuine issues of material fact and the case is appropriate for judgment as a matter of law. A party resisting the motion for summary judgment ‘cannot merely rely on the pleadings or other unsupported conclusory allegations, but must present competent admissible evidence by affidavit or other comparable means which raises an issue of material fact.’ ”Riedlinger v. Steam Bros., Inc., 2013 ND 14, ¶ 10, 826 N.W.2d 340 (quoting Burris Carpet Plus, Inc. v. Burris, 2010 ND 118, ¶¶ 10–11, 785 N.W.2d 164).

A

[¶ 10] McDermott argues the purchase option was not valid or enforceable because Pifer gave no consideration for the agreement and an option to purchase property does not meet the legal requirements for a “valid inter vivos gift.”

[¶ 11] This Court recognizes that a person may give an option to purchase real property. If no consideration is given for an option to purchase real property, the option “may be withdrawn at any time before acceptance.” Dole v. Hansen, 238 N.W.2d 58, 61 (N.D.1975); see also 14 R. Powell & M. Wolf, Powell on Real Property § 81.01[2][b], at 81–11 (2013) (“If the option is given gratuitously, without payment or other consideration from the prospective purchaser, the ‘option’ constitutes merely an offer to sell that the seller can withdraw at any time.” (footnote omitted)); III American Law of Property § 11.17, at 47 (1952) (“If given gratuitously, [an option] amounts merely to an offer and may be withdrawn at any time prior to acceptance.” (footnote omitted)); cf. Schulz v. Saeman, 150 N.W.2d 67 Syll. 1 (N.D.1967) ( “Generally, an option to purchase property of the estate, at book value or appraised value, or at a price named, may be created by a will.”); 4 H. Tiffany, Law of Real Property § 1097, at 561 (3d ed. 1975) (“An option to purchase property of the estate may be created by will....”). An option to purchase real property given without consideration is valid and enforceable if “the option agreement was unconditionally accepted within the time prescribed therein and no attempt was made to withdraw it before acceptance.” Alfson v. Anderson, 78 N.W.2d 693, 698 (N.D.1956).

[¶ 12] McDermott does not argue that the purchase option was withdrawn, and we have not found any indication in the record that either Bevan or McDermott formally or informally withdrew the option prior to Pifer's attempt to exercise the option. See Dole, 238 N.W.2d at 60 (optioners “served notice on [optionees] that any option granted under the original agreement was withdrawn and that the contract was without consideration and unenforceable”). Bevan's creation of a joint tenancy in the property with McDermott in 2009 cannot be considered evidence of withdrawal of the purchase option because the 2004 agreement specifically...