Trosen v. Trosen

• Decision Date: 14 January 2014
• Docket Number: No. 20130034.,20130034.
• Citation: 841 N.W.2d 687,2014 ND 7
• Court: North Dakota Supreme Court
• Parties: Jeff TROSEN, Plaintiff and Appellant v. Shirley TROSEN, individually, and in her capacity as Trustee of the Trosen Family Trust, dated August 23, 2002, and Brent Trosen, Defendants and Appellees.

841 N.W.2d 687

2014 ND 7

Jeff TROSEN, Plaintiff and Appellant

v.Shirley TROSEN, individually, and in her capacity as Trustee of the Trosen Family Trust, dated August 23, 2002, and Brent Trosen, Defendants and Appellees.

No. 20130034.

Supreme Court of North Dakota.

Jan. 14, 2014.

DeWayne A. Johnston, Grand Forks, ND, for plaintiff and appellant; submitted on brief.

Michael J. Morley, Grand Forks, ND, for defendants and appellees.

KAPSNER, Justice.

[¶ 1] Jeff Trosen appeals from a district court judgment dismissing his legal and equitable claims against Shirley Trosen and Brent Trosen. We affirm the judgment, concluding the district court did not err by granting Shirley Trosen and Brent Trosen's motion for judgment as a matter of law and dismissing Jeff Trosen's legal claims, and the district court reached the right result with respect to Jeff Trosen's equitable claims, but for the wrong reason.

I

[¶ 2] Shirley Trosen owned farmland and leased various tracts separately to her sons, Jeff Trosen and Brent Trosen. In 2008, Shirley Trosen and Jeff Trosen signed a “Farm Lease” granting Jeff Trosen use of certain described land from January 2008 through December 2010. The written document did not specify the amount of rent under the lease. Testimony at trial, however, demonstrated that the Trosen family members paid $65 per tillable acre under their various leases, and the amount of tillable acres under each lease was calculated annually by the county Farm Service Agency (“FSA”) office based upon the number of acres going into or coming out of the Conservation Reserve Program (“CRP”) on the relevant tract for that growing season.

[¶ 3] In February 2010, Jeff Trosen was unable to pay the annual rent on the land when it came due. Shirley Trosen and Brent Trosen agreed Brent Trosen would farm the land during the 2010 crop year, and FSA was advised to change its listing of the farm operator on the land from Jeff Trosen to Brent Trosen. In September 2010, Shirley Trosen and Brent Trosen signed an agreement purportedly leasing the disputed land to Brent Trosen through 2015.

[¶ 4] On January 1, 2011, Jeff Trosen met with Shirley Trosen and indicated he wished to resume farming the land he previously leased from her. The parties re-signed their 2008 “Farm Lease,” with a handwritten notation, initialed by the parties, extending the term of the lease for three years through December 2013. That week, Jeff Trosen tendered to Shirley Trosen a check for $28,522, dated “Jan 2011.” The memo line of the check indicated it was for “2011 farm land.”

[¶ 5] Shirley Trosen contacted FSA and advised them to list Jeff Trosen as the operator on the described property, rather than Brent Trosen. Jeff Trosen then went to the FSA office to find out how many tillable acres were available on those tracts of land for the 2011 growing season. Upon being advised 438.8 tillable acres were available, Jeff Trosen calculated the annual rent which would be due under the lease and made a notation on the farm lease agreement indicating there were 438.8 tillable acres and an annual payment due of $28,522. On January 6, 2011, FSA sent a letter to Jeff Trosen advising him he had been listed as the operator of the farm unit and the prior operator had been removed.

[¶ 6] When Brent Trosen learned of the January 1, 2011 lease between Shirley Trosen and Jeff Trosen, he advised Shirley Trosen that he held a lease on that land for the 2011–2015 growing seasons. Shirley Trosen contacted FSA and advised them that Brent Trosen should be listed as the farm operator on the land for 2011. On January 10, 2011, FSA sent a letter to Jeff Trosen informing him he had been removed as the operator of the farm unit and a new operator had been added. Shirley Trosen did not cash the check given to her by Jeff Trosen, and she eventually returned it.

[¶ 7] Jeff Trosen sued Shirley Trosen and Brent Trosen for breach of contract, interference with contractual relations, specific performance, declaratory relief, and injunctive relief. The case was bifurcated, with the breach of contract and interference with contractual relations claims to be tried to a jury and the remaining, equitable claims to be tried to the court after the jury trial. At the conclusion of the evidence in the five-day jury trial, but before the case was submitted to the jury, both sides moved for judgment as a matter of law under N.D.R.Civ.P. 50. The district court determined the January 1, 2011 lease agreement between Shirley Trosen and Jeff Trosen was barred by the statute of frauds and therefore no evidentiary basis existed to support the breach of contract or interference with contractual relations claims. The court therefore granted Shirley Trosen and Brent Trosen's motion for judgment as a matter of law on the legal claims and dismissed the jury.

[¶ 8] The parties stipulated that the testimony and evidence presented to the jury would be the basis for the district court's determination of the equitable issues. In a subsequent order, the district court rejected Jeff Trosen's remaining, equitable claims. Judgment was then entered dismissing all of Jeff Trosen's legal and equitable claims against Shirley Trosen and Brent Trosen.

II

[¶ 9] Jeff Trosen argues the district court erred in granting Shirley Trosen and Brent Trosen's motion for judgment as a matter of law and in dismissing Jeff Trosen's legal claims. “A district court's decision on a motion under N.D.R.Civ.P. 50 to grant or deny judgment as a matter of law is based upon ‘whether the evidence, when viewed in the light most favorable to the party against whom the motion is made, leads to but one conclusion as to the verdict about which there can be no reasonable difference of opinion.’ ” Forsman v. Blues, Brews and Bar–B–Ques, Inc., 2012 ND 184, ¶ 8, 820 N.W.2d 748 (quoting In re Estate of Stave, 2007 ND 53, ¶ 11, 729 N.W.2d 706). “On appeal, [the] district court's decision on a motion for judgment as a matter of law [under Rule 50] is fully reviewable.” Forsman, at ¶ 8 (quoting In re Estate of Stave, at ¶ 11);Martin v. Trinity Hosp., 2008 ND 176, ¶ 28, 755 N.W.2d 900.

[¶ 10] In granting the motion for judgment as a matter of law, the district court correctly noted that the existence of a valid contract was an essential element of Jeff Trosen's claims for breach of contract and interference with contractual relations. See, e.g., Thimjon Farms P'ship v. First Int'l Bank & Trust, 2013 ND 160, ¶ 11, 837 N.W.2d 327; Godon v. Kindred Pub. Sch. Dist., 2011 ND 121, ¶ 13, 798 N.W.2d 664;Van Sickle v. Hallmark & Assocs., Inc., 2008 ND 12, ¶ 24, 744 N.W.2d 532. The court determined that, on the undisputed evidence presented to the jury, the January 1, 2011 lease was invalid under the statute of frauds and no evidentiary basis existed to submit Jeff Trosen's claims to the jury:

The Court finds that the January 1, 2011 lease does not meet the Statute of Frauds and therefore, is not a valid contract. Without a valid contract, there is no evidentiary basis for Jeff Trosen's claim against Shirley Trosen for breach of contract and Jeff Trosen's claim against Brent Trosen for intentional interference with contract. The Court makes the finding that the January 1, 2011 lease is not a valid contract based on the undisputed evidence before the Court and the jury in this case.

Jeff Trosen contends the court erred in holding the lease was barred by the statute of frauds.

[¶ 11] Section 9–06–04, N.D.C.C., provides in pertinent part:

The following contracts are invalid, unless the same or some note or memorandum thereof is in writing and subscribed by the party to be charged, or by the party's agent:

....

3. An agreement for the leasing for a longer period than one year, or for the sale, of real property, or of an interest therein.

The January 1, 2011 lease agreement was for three years and falls squarely within the prohibition of N.D.C.C. § 9–06–04. Therefore, the lease is invalid unless it is memorialized in a writing signed by Shirley Trosen, the party to be charged, or by her agent.

[¶ 12] Although Shirley Trosen signed the written document entitled “Farm Lease,” that document does not satisfy the statute of frauds. To constitute a sufficient memorandum to take a contract out of the statute of frauds, a writing “must contain all the essential or material conditions and terms of the contract,” Stout v. Fisher Indus., Inc., 1999 ND 218, ¶ 10, 603 N.W.2d 52 (citation omitted), including the identity of the parties, the subject matter of the agreement, and the express consideration. Rohrich v. Kaplan, 248 N.W.2d 801, 803 (N.D.1976) (citing Johnson v. Auran, 214 N.W.2d 641, 649–50 (N.D.1974)). The undisputed evidence in this case disclosed the written lease signed by Shirley Trosen on January 1, 2011 did not contain any provision expressing the consideration for the lease. Jeff Trosen concedes he added the notation “$28,522” on the written lease several days later, and the lease makes no mention of the alleged rental price of $65 per acre.

[¶ 13] Jeff Trosen contends the district court erred when failing to recognize the exception to the parol evidence rule allowing evidence outside the four corners of the agreement to explain ambiguous terms. Jeff Trosen cites numerous cases indicating a contract can be part written and part oral, and parol evidence may be admitted and considered to clarify ambiguities. He argues the missing terms in the written lease agreement therefore may be “easily explained by an examination of the circumstances under which the lease was made, and the matter to which it relates.”

[¶ 14] Jeff Trosen failed to recognize the crucial difference between the use of parol evidence to explain ambiguous terms in a written agreement and the lack of essential terms in a writing evidencing a contract which falls within the statute of frauds. This Court consistently has held that, to satisfy the statute of frauds, the writing must contain all of the...