VALLEY HONEY CO., LLC v. Graves, 20020254.

• Decision Date: 21 July 2003
• Docket Number: No. 20020254.,20020254.
• Citation: VALLEY HONEY CO., LLC v. Graves, 666 N.W.2d 453, 2003 ND 125 (N.D. 2003)
• Parties: VALLEY HONEY COMPANY, LLC, Plaintiff, Appellee, and Cross-Appellant v. Rebecca GRAVES, Defendant and Cross-Appellee, and Larry Young, Defendant, Appellant, and Cross-Appellee.
• Court: North Dakota Supreme Court

666 N.W.2d 453

2003 ND 125

VALLEY HONEY COMPANY, LLC, Plaintiff, Appellee, and Cross-Appellant v.Rebecca GRAVES, Defendant and Cross-Appellee, andLarry Young, Defendant, Appellant, and Cross-Appellee.

No. 20020254.

Supreme Court of North Dakota.

July 21, 2003.

Rehearing Denied August 26, 2003.

James J. Coles, Coles Law Firm, PC, Bismarck, for plaintiff, appellee, and cross-appellant.

Larry Young, pro se, Bismarck, defendant, appellant, and cross-appellee.

Rebecca Graves, pro se(no appearance), Grand Forks, defendant and cross-appellee.

SANDSTROM, Justice.

[¶ 1]Larry Young appeals a South Central Judicial District Court judgment holding he and Rebecca Graves have no right, title, or interest in the property that is the subject of the action and holding they are jointly and severally liable to Valley Honey Company for costs of $1,794.79.Valley Honey cross-appeals on the ground that the district court erred in failing to find Graves and Young liable for damages.We affirm.

I

[¶ 2] The property in this action is located in Burleigh County and is described as the Northwest Quarter of the Southwest Quarter of Section Fifteen, Township One Hundred Forty North, Range Eighty West of the 5th Principal Meridian.

[¶ 3] The property was used by a honey-packing corporation and was owned by Albert and Iva Knoefler until February 1998, when the Knoeflers transferred the property by warranty deed to Valley Honey Company.Valley Honey Company, a corporation, acting through Clark Stott, who was registered with North Dakota's Secretary of State in 2000 as the president of the corporation, with funding provided by Bruce Anderson, bought the property in an effort to bail out the Knoefler family from financial setbacks.Clark Stott and Harold Knoefler carried on the honey-packing operation until 2000, when they had a falling out.Valley Honey Company, through its managing officer, Bruce Anderson, limited Clark Stott's role in the company and terminated Knoefler's role, forbidding him entry to the premises.In 2001, Valley Honey relocated the plant's operations to Idaho.

[¶ 4]Rebecca Graves, Harold Knoefler's stepdaughter, and Larry Young, a former business associate of Knoefler's, claim an interest in the real property by virtue of a series of quitclaim deeds, which were recorded in Burleigh County.These deeds are:

1.From Albert Knoefler to Rebecca Graves and Larry Young, a quitclaim deed dated October 27, 2000, and recorded October 31, 2000, as DocumentNo. 547229 with the Burleigh County Recorder.

2.From Ray Knoefler to Rebecca Graves and Larry Young, a quitclaim deed dated October 27, 2000, and recorded October 31, 2000, as DocumentNo. 547230 with the Burleigh County Recorder.

3.From Cathrine Curtis to Rebecca Graves and Larry Young, a quitclaim deed dated October 30, 2000, and recorded November 1, 2000, as DocumentNo. 547295 with the Burleigh County Recorder.

4.From Valley Honey Company to Rebecca Graves and Larry Young, a quitclaim deed dated December 9, 2000, executed in Utah and recorded December 11, 2000, as DocumentNo. 548462 with the Burleigh County Recorder.

[¶ 5] Valley Honey filed suit on June 1, 2001, and Graves and Young both counterclaimed.At the May 15, 2002, trial, the validity of the December 9, 2000, deed was contested.At a Utah meeting with Harold Knoefler and a financier, Ted Gubler, Clark Stott signed the deed.Clark Stott testified at trial that he was unaware Knoefler would be present at the meeting.Stott testified Knoefler pressured him to sign the deed, threatening to cut him out of another business deal if he refused.Stott testified he did not want to sign the deed at all, but because of the pressure from Knoefler, he agreed to sign it only with certain conditions attached.Stott testified that affixed to the deed was a document entitled Attachment A, signed by himself, Knoefler, and Gubler, which placed a number of conditions on the recording of the deed.One of the conditions was that Harold Knoefler would not take the property free and clear until the debts to Clark Stott, in the amount of $175,000, were paid.The quitclaim deed recorded by Knoefler on December 11, 2000, included an Attachment A, which was a handwritten compilation of numbers, but Stott testified it was not the same document he signed in Utah.

[¶ 6]The district court concluded the December 9, 2000, document was not a deed but rather a conditional contract that was not satisfied.The court found the conveyance was "limited to `the interests of Clark B. Stott,' which were virtually nonexistent at the time of the conveyance, in as much as Bruce Anderson had essentially become the full owner and manager of [Valley Honey]."In addition, the district court concluded the validity of the deed was also undermined by the fraudulent conduct of Harold Knoefler in removing the agreed-upon Attachment A, which placed restrictions on his authority to record the deed, and replacing it with a meaningless attachment.The district court ordered entry of judgment on July 19, 2002, holding Graves and Young had no right, title, or interest in the property by any of the recorded quitclaim deeds because the grantors did not have a right, title, or interest in the property to legally convey to Graves or Young.The district court also awarded costs of $1794.79 to Valley Honey.Young appealed the judgment.Valley Honey cross-appealed the judgment for damages.On July 24, 2002, Valley Honey moved to amend the judgment under Rule 60(b), N.D.R.Civ.P. Valley Honey moved to add the cost of the abstract for the real property subject to the quiet title action in the amount of $657.00.On August 13, 2002, the district court denied Valley Honey's Rule 60motion to amend.

[¶ 7]The district court had jurisdiction under N.D. Const. art. VI, § 8, andN.D.C.C. § 27-05-06.This Court has jurisdiction under N.D. Const. art. VI, § 6, andN.D.C.C. §§ 28-27-01and28-27-02.

II

[¶ 8] Young argues he and Graves own the property under a validly executed deed.He argues the district court's conclusion that the December 9, 2000, deed was not a valid grant to them by Valley Honey Company but instead was an unsatisfied conditional contract is wrong because, under N.D.C.C. § 9-06-07, a delivery of a grant cannot be made conditionally.He argues the deed was not delivered with conditions and therefore Stott's testimony of having placed conditions on the granted quitclaim deed is inadmissible parol evidence.

[¶ 9] Graves and Young do not receive a right, title, or interest under the October 27, 2000, deeds or the October 30, 2000, deed because the grantors did not have title to convey the property.

[¶ 10] Under the December 9, 2000, conveyance, whether the Attachment A as recorded was the attachment affixed to the deed at the time it was signed by Stott is a question of fact.Questions of fact are reviewed under the clearly erroneous standard of review.N.D.R.Civ.P. 52(a);Longtine v. Yeado,1997 ND 166, ¶ 5, 567 N.W.2d 819."A finding of fact is clearly erroneous if it is induced by an erroneous view of the law, if no evidence exists to support it, or if, on review of the entire evidence, the reviewing court is left with a definite and firm conviction a mistake has been made."Longtine,at ¶ 5.

[¶ 11]The district court found the December 9, 2000, deed as filed had attached to it an Attachment A different from the one agreed to and signed in Utah by Knoefler, Gubler, and Stott.The court found the valid attachment was the one agreed upon by all parties in Utah rather than the one that was attached to the deed when it was recorded.The Attachment A that was agreed upon contained conditions required to be met before delivery to Knoefler could be valid:

Stott, having personally guaranteed a loan of $175,000 that is of record against the property, that is now in default, had to sign his interest in Valley Honey to the lenders (the $175,000 lender & the organizations controlled by Bruce Anderson) and as such there is no interest free & clear until all debts are paid by Harold Knoefler, or to be caused by Harold to be paid by others.At that time & only will all of Stott interest in Valley Honey, LLC, be subject to this Quit Claim Deed.

The district court found that Clark Stott initially refused to sign the deed until Knoefler, Gubler, and Stott came to an agreement about conditions for the deed to take effect.Testimony supports the district court's finding.The district court was not clearly erroneous in finding the filed Attachment A was different from the agreed-upon Attachment A.

[¶ 12] In reviewing the validity of the December 9, 2000, deed, we follow our standard of review of a district court's disposition of a deed as stated in U.S. Bank v. Koenig,2002 ND 137, ¶ 8, 650 N.W.2d 820:

Except as otherwise provided in N.D.C.C. ch. 47-09, grants are interpreted in the same manner as contracts.N.D.C.C. § 47-09-11.Contracts are construed to give effect to the parties' mutual intent at the time of contracting.N.D.C.C. § 9-07-03;Haag v. Noetzelman,1999 ND 157, ¶ 6, 598 N.W.2d 121.The parties' intent must be ascertained from the writing alone if possible.N.D.C.C. § 9-07-04;Haag,at ¶ 6.The parties' intent must be ascertained from the entire instrument, and every clause, sentence, and provision should be given effect consistent with the main purpose of the contract.Haag,at ¶ 6....If the parties' intent can be ascertained from the writing alone, the interpretation of the contract is entirely a question of law, and we independently examine and construe the contract to determine if the trial court erred in its interpretation of the contract.Haag,at ¶ 6.

[¶ 13] The December 9, 2000, contract is not ambiguous and can be ascertained from the writing alone.This Court will review whether the contract created a valid deed as a matter of law.Haag v. Noetzelman,1999 ND 157, ¶ 6, 598 N.W.2d 121.

[¶ 14] Under N.D.C.C. § 47-09-13, a grant in a...