Vaage v. State (In re Estate of Vaage)

• Decision Date: 18 February 2016
• Docket Number: No. 20150121.,20150121.
• Citation: 875 N.W.2d 527
• Parties: In the Matter of the ESTATE OF Lowell H. VAAGE, Deceased, Correne Vaage, as Special Personal Representative of the Estate of Lowell H. Vaage, Plaintiff and Appellant v. The State of North Dakota, the Estate of Kenneth Vaage; and his surviving widow, Verna L. Vaage; and their children; James Vaage, Gregory Vaage; Bruce Vaage; and Kathleen M. Hettenbough; the Estate of Donald Vaage, and his surviving widow, Mae L. Vaage, and their child, Gary Vaage—if living, and all other persons interested in their estates, if deceased; and all other persons unknown claiming any estate or interest in or lien or encumbrance on the property described in the Complaint, Defendants James Vaage, Gregory Vaage and Bruce Vaage, Appellees.
• Court: North Dakota Supreme Court

875 N.W.2d 527

In the Matter of the ESTATE OF Lowell H. VAAGE, Deceased,Correne Vaage, as Special Personal Representative of the Estate of Lowell H. Vaage, Plaintiff and Appellant

v. The State of North Dakota, the Estate of Kenneth Vaage; and his surviving widow, Verna L. Vaage; and their children; James Vaage, Gregory Vaage; Bruce Vaage; and Kathleen M. Hettenbough; the Estate of Donald Vaage, and his surviving widow, Mae L. Vaage, and their child, Gary Vaage—if living, and all other persons interested in their estates, if deceased; and all other persons unknown claiming any estate or interest in or lien or encumbrance on the property described in the Complaint, DefendantsJames Vaage, Gregory Vaage and Bruce Vaage, Appellees.

No. 20150121.

Supreme Court of North Dakota.

Feb. 18, 2016.

Larry M. Baer (argued), West Des Moines, IA, and Rauleigh D. Robinson (appeared), Menoken, N.D., for plaintiff and appellant.

Scott M. Knudsvig (argued) and Matthew H. Olson (on brief), Minot, N.D., for defendants and appellees. Estate of Vaage.

McEVERS, Justice.

[¶ 1] Correne Vaage, surviving spouse and special personal representative of the Estate of Lowell H. Vaage ("Lowell Vaage estate" or "Estate"), appeals from a judgment dismissing its claim to reform a personal representative's deed issued by the John Vaage estate to Lowell Vaage. We affirm, concluding the district court's finding the Lowell Vaage estate failed to prove fraud or mistake sufficient to reform the personal representative's deed was not clearly erroneous.

I

[¶ 2] Lowell Vaage's father, John Vaage, owned 600 surface acres and 275 mineral acres in Burke County. In 1973, John Vaage and Lowell Vaage entered into a contract for deed for the sale of the real property. Within the legal description, the contract for deed stated "excepting and reserving, an undivided one-half interest in and to all the ... minerals" beneath the property. The contract also provided the final payment was due on or before January 15, 1983, and a warranty deed would be issued to Lowell Vaage upon satisfaction of the contract.

[¶ 3] John Vaage died on May 23, 1983, before Lowell Vaage satisfied the contract for deed. One of John Vaage's other sons, Kenneth Vaage, was appointed personal representative of John Vaage's estate. After Lowell Vaage made the final payment on the contract for deed in March 1984, Kenneth Vaage issued a personal representative's deed to Lowell Vaage for the property. Following the legal description, the deed stated "[e]xcepting and reserving an undivided one-half interest in and to the remaining ... minerals" beneath the property. In May 1984, Kenneth Vaage issued another personal representative's deed conveying 137.5 mineral acres to John Vaage's three sons, Kenneth Vaage, Donald Vaage, and Lowell Vaage, in equal proportions. Lowell Vaage died in April 2003.

[¶ 4] In 2012, the Lowell Vaage estate sued the heirs of Kenneth Vaage and Donald Vaage ("Vaage defendants"), claiming the March 1984 personal representative's deed, by reserving a one-half interest in the remaining minerals, did not conform to the language of the 1973 contract for deed, which reserved a one-half interest in all minerals beneath the property. The Estate alleged that, under the 1973 contract for deed, John Vaage intended to convey all 275 mineral acres under the property to Lowell Vaage. The Estate requested the court to reform the personal representative's deed and declare the Estate the owner of all 275 mineral acres.

[¶ 5] The parties agreed that, at a minimum, the March 1984 personal representative's deed conveyed 137.5 mineral acres to Lowell Vaage and he received 45.8333 mineral acres under the May 1984 personal representative's deed. The parties thus agree that, out of the 275 mineral acres owned by John Vaage, the Lowell Vaage Estate owns 183.3333 and 91.6666 are in dispute.

[¶ 6] Both parties moved for summary judgment in early 2013. The Estate argued the March 1984 personal representative's deed was fraudulently altered and must be reformed to conform to the 1973 contract for deed. The Vaage defendants argued only the March 1984 personal representative's deed must be looked at to ascertain John Vaage's intent. The district court denied both parties' motions. The court concluded neither summary judgment nor reformation would be granted to either party. The court also concluded the personal representative of John Vaage's estate was bound to honor the intent of John Vaage as stated in the 1973 contract for deed, and the mineral reservation language of the March 1984 personal representative's deed did not mirror the language of the 1973 contract for deed.

[¶ 7] Both parties moved for summary judgment again in late 2013. The Estate argued the Duhig rule, under the March 1984 personal representative's deed, precluded a reservation of minerals to the John Vaage estate. The Estate alternatively argued the language of the purported reservation clause contained in either the 1973 contract for deed or the March 1984 personal representative's deed is vague, ambiguous, and unenforceable. The Estate claimed for purposes of the motion, it made no difference whether any fraud was committed or whether a basis existed to reform the March 1984 personal representative's deed. The Vaage defendants argued the Duhig rule did not apply to the March 1984 personal representative's deed, and the deed is not vague or ambiguous. The district court denied the motions, concluding the Estate's alternative arguments precluded summary judgment. The court also concluded material issues of fact existed, which precluded summary judgment.

[¶ 8] At trial, the Estate argued the March 1984 personal representative's deed was fraudulently altered. To support this argument, the Estate provided testimony from a document examiner that the words "the remaining" in the personal representative's deed appeared to be out of alignment and may have been inserted into the deed at a later date. The document examiner testified he could not say when the words were inserted or why they may have been inserted at a later date. He also testified he could not rule out an innocent explanation for the words appearing out of alignment.

[¶ 9] The Estate also offered the pre-trial deposition testimony of Correne Vaage to support its fraud argument. She testified the recorded March 1984 personal representative's deed was not the same deed she saw in the attorney's office on the day Lowell Vaage made the final payment on the contract for deed. She testified her recollection was the language of the deed was identical to the language of the contract for deed. She testified she believed the deed was altered after she saw it, but did not know who made the alleged alteration or why it was made.

[¶ 10] The Estate's post-trial brief argued for the first time that the March 1984 personal representative's deed may have been altered due to a mistake. The Estate argued regardless of whether fraud or mistake occurred, the language of the personal representative's deed did not match the language of the contract for deed and must be reformed.

[¶ 11] The district court issued a memorandum decision concluding it lacked subject matter jurisdiction to hear the Estate's fraud claim. The court stated the Lowell Vaage estate should have brought an action against the John Vaage estate because the personal representative's deed was issued during the administration of John Vaage's estate. The court also concluded the Lowell Vaage estate's fraud claim was barred by the five-year statute of limitations under N.D.C.C. § 30.1–01–03.

[¶ 12] The court also addressed the Estate's claim for reformation, finding the Estate did not present clear and convincing evidence of fraud or mistake and declining to reform the March 1984 personal representative's deed. The court dismissed the Estate's action and a judgment was entered quieting title to the 91.6666 disputed mineral acres in favor of the Vaage defendants.

II

[¶ 13] The Estate argues the district court erred in concluding it lacked subject matter jurisdiction over the quiet title and reformation claim against the Vaage defendants.

[¶ 14] When jurisdictional facts are not disputed, the issue of subject matter jurisdiction is a question of law, which we review de novo. In re Estate of Bartelson, 2011 ND 219, ¶ 8, 806 N.W.2d 199. Here, the jurisdictional facts are not in dispute and we review the issue de novo.

[¶ 15] Under N.D.C.C. § 30.1–12–05, a district court has jurisdiction to determine ownership of property alleged to belong to an estate. Bartelson, 2011 ND 219, ¶ 9, 806 N.W.2d 199. The Estate brought this action against the heirs of Kenneth Vaage and Donald Vaage, who claim an interest in the property the Estate alleges it owns. The district court concluded it lacked subject matter jurisdiction "to try the case of an alleged fraud committed by the personal representative in the Estate of John Vaage in the unrelated case of the Estate of Lowell Vaage." The Estate's action against the Vaage defendants was to reform a deed and quiet title to property. The fraud claim was made within the context of reforming a deed under N.D.C.C. § 32–04–17. The primary purpose of the Estate's action was to reform a deed and determine ownership of property the Estate alleged it owns. We conclude the district court erred in determining it lacked subject matter jurisdiction over the Estate's action to determine ownership of the property.

III

[¶ 16] The Estate argues the district court erred in concluding the Estate's fraud claim was barred by the five-year statute of limitations under N.D.C.C. § 30.1–01–03, dealing with fraud in connection with a probate proceeding.

[¶ 17] The Estate, however, brought a quiet title and reformation action against the Vaage defendants, not a fraud action in connection with the administration of John Vaage's estate, and we conclude the statute of limitations under N.D.C.C. § 30.1–01–03 is not applicable to the Estate's quiet title and...