Zundel v. Zundel, 20170003.

• Decision Date: 01 September 2017
• Docket Number: No. 20170003.,20170003.
• Citation: Zundel v. Zundel, 901 N.W.2d 731 (N.D. 2017)
• Parties: Loren Zundel and Richard ZUNDEL, Plaintiffs, Appellees, and Cross-Appellants v. Stephen ZUNDEL, Defendant, Appellant, and Cross-Appellee
• Court: North Dakota Supreme Court

901 N.W.2d 731

Loren Zundel and Richard ZUNDEL, Plaintiffs, Appellees, and Cross-Appellants

v.Stephen ZUNDEL, Defendant, Appellant, and Cross-Appellee

No. 20170003.

Supreme Court of North Dakota.

Filed September 1, 2017

Benjamin J. Hasbrouck, Fargo, N.D., for plaintiffs, appellees, and cross-appellants.

Fallon M. Kelly, Lisbon, N.D., for defendant, appellant, and cross-appellee.

McEvers, Justice.

[¶1] Stephen Zundel appeals a district court judgment declaring Loren and Richard Zundel complied with a lease relating to grain and farm equipment storage, declaring the lease remains in effect, and dismissing Stephen Zundel's eviction action against Loren and Richard Zundel. Loren and Richard Zundel cross-appeal the judgment awarding them $21,182 in attorney's fees and costs. We affirm in part, reverse in part, and remand.

I

[¶2] Edwin Zundel owned real property in LaMoure County. Approximately five acres of the property, known as the "bin site," contained grain bins and has been used for storing grain and agricultural equipment since 1969. Edwin Zundel and his sons, Loren, Richard, Stephen, and Donald, used the bin site in varying amounts.

[¶3] In June 2006, Edwin Zundel, as general partner of the Zundel Family Real Estate Limited Partnership, leased the bin site to his sons at an annual rate of $400. The lease also included provisions regarding the use of the property, repairs, and default. The lease provided the bin site was to be used primarily for storing crops, farming equipment, and farming supplies. The lease provided the term of the agreement was the life of all tenants. The family partnership subsequently conveyed the bin site to Stephen Zundel and he became the landlord under the lease.

[¶4] A dispute arose in 2014 after Stephen Zundel demanded additional rent of $400 from each tenant. Loren and Richard Zundel refused to pay additional rent and expressed their position that the total annual rent was $400 from all tenants. Stephen Zundel also demanded that repairs be made to the bin site, including removing small trees, repairing electrical panels and boxes, and repairing two buildings and a pole barn.

[¶5] In April 2015 Loren and Richard Zundel sued Stephen Zundel, alleging they complied with the terms of the lease, and Stephen demanded unreasonable repairs be made to the property. Loren and Richard Zundel sought a judgment declaring that they had fulfilled their obligations under the terms of the bin site lease. They also sought contribution from Stephen Zundel for rents and repairs because he remained a tenant under the lease.

[¶6] Stephen Zundel denied the allegations and counterclaimed for eviction, alleging Richard and Loren Zundel breached the bin site lease by failing to make repairs and pay additional rent. Stephen Zundel also sought a declaratory judgment seeking to have the lease deemed void or voidable on its ten-year anniversary under N.D.C.C. § 47-16-02, providing a ten-year limit on leases of agricultural land.

[¶7] Loren and Richard Zundel moved for partial judgment on the pleadings, arguing the total annual rent due under the lease was $400 from all tenants. They also argued the lease did not violate N.D.C.C. § 47-16-02 because the bin site was not agricultural land. The district court granted the motion, concluding the total annual rent under the lease was $400. The court also concluded the bin site was not agricultural land and the lease did not violate the provisions of N.D.C.C. § 47-16-02.

[¶8] After a January 2016 trial, the district court declared Loren and Richard Zundel fully complied with the bin site lease and the lease remained in effect. The court also found Stephen Zundel's counterclaims were frivolous and dismissed his counterclaim to evict Loren and Richard Zundel from the property. The court awarded Loren and Richard Zundel attorney's fees for defending Stephen Zundel's frivolous counterclaims. Loren and Richard Zundel requested over $67,000 in attorney's fees. After a hearing, the court awarded Loren and Richard Zundel $21,182 in attorney's fees and costs.

II

[¶9] Stephen Zundel argues the district court erred in granting Loren and Richard Zundel's motion for judgment on the pleadings, concluding the bin site lease did not violate N.D.C.C. § 47-16-02 because the property covered by the lease is not agricultural land.

[¶10] A party may move for judgment on the pleadings under Rule 12(c), N.D.R.Civ.P. A pleading should not be dismissed under N.D.R.Civ.P. 12(c) unless it appears beyond doubt that no set of facts support a party's claim which would entitle him to relief. Nelson v. McAlester Fuel Co. , 2017 ND 49, ¶ 20, 891 N.W.2d 126 (citing Tibert v. Minto Grain , 2004 ND 133, ¶ 7, 682 N.W.2d 294 ). We view the pleading in the light most favorable to the pleading party, and the allegations are taken as true. Nelson , at ¶ 20. A district court's decision granting judgment on the pleadings under N.D.R.Civ.P. 12(c) is reviewed de novo. Nelson , at ¶ 20.

[¶11] "Statutory interpretation is a question of law, fully reviewable on appeal." Tangedal v. Mertens , 2016 ND 170, ¶ 8, 883 N.W.2d 871. Words in a statute are given their plain, ordinary, and commonly understood meaning, unless a contrary intention plainly appears or unless defined by statute. N.D.C.C. § 1-02-02. "Whenever the meaning of a word or phrase is defined in any statute, such definition is applicable to the same word or phrase wherever it occurs in the same or subsequent statutes, except when a contrary intention plainly appears." N.D.C.C. § 1-01-09.

[¶12] The general rules of contract interpretation apply to the interpretation of leases. Kittleson v. Grynberg Petroleum Co. , 2016 ND 44, ¶ 10, 876 N.W.2d 443. A contract must be construed as a whole to give effect to each provision if reasonably practicable. N.D.C.C. § 9-07-06. Words are given their plain, ordinary, and commonly understood meaning, unless a contrary intention plainly appears. N.D.C.C. § 9-07-09. Contract interpretation is a question of law, fully reviewable on appeal. Kittleson , at ¶ 10.

[¶13] Resolving this issue requires an analysis of N.D.C.C. § 47-16-02 and the bin site lease. Section 47-16-02, N.D.C.C., states that "[n]o lease or grant of agricultural land reserving any rent or service of any kind for a longer period than ten years shall be valid." This Court has outlined the requirements for a district court to declare an agricultural lease invalid under N.D.C.C. § 47-16-02 :

In the jurisdictions where the law restricts the duration of a lease of agricultural land, before a court is justified in declaring it invalid, it must find that the lease is of agricultural land; that the use of the land for agricultural purposes is not excluded; that rent or service is reserved; and that the term is within the restriction.

Anderson v. Lyons , 2014 ND 61, ¶ 12, 845 N.W.2d 1 (quoting Anderson v. Blixt , 72 N.W.2d 799, 803 (N.D. 1955) ). For a court to invalidate an agricultural lease under N.D.C.C. § 47-16-02, all four requirements must be satisfied. See Blixt , at 803 (lease satisfied first three requirements, and issue decided was whether the lease extended for a period longer than ten years).

[¶14] Under the bin site lease, the terms "bin site" and "leased property" are synonymous. "Bin site" is defined as "the land not suitable for farming upon which storage bins owned by Landlord and Tenants are built, but does not include the house, yard area, quonset, and pasture land of the Leased Property." Regarding the use of the bin site, the lease provides, "the Leased Property shall be used and occupied only for the purpose of storing crop, farming equipment, and farming supplies and other purposes relating thereto, and for no other purpose or purposes without the Landlord's written consent."

[¶15] The district court ruled the bin site lease does not violate N.D.C.C. § 47-16-02. The court held the bin site lease is not a lease of agricultural land in part because "[i]n the lease ... the parties agree that this land is not suitable for farming." The court also decided the use of the leased property is not for agricultural purposes:

In considering what "agricultural purposes" means in the context of the decisions of the North Dakota Supreme Court applicable to N.D.C.C. § 47-16-02, and other courts regarding similar statutory and constitutional provisions, it is clear to this court that grain storage and parking agriculture equipment is not a lease purpose that this section of law seeks to limit in duration.

The district court, in discussing cases from this Court and other courts, stated that "[i]n those opinions courts seem to hold in essence, that agricultural purpose means tilling to raise crops or pasturing livestock."

[¶16] Stephen Zundel argues the bin site lease covers agricultural land because it covers property capable of grain storage, grain handling, and storage of farm equipment. He argues the lease is capable of an agricultural purpose because it allows grain storage, storage of farming equipment and farming supplies, and other agricultural purposes such as grain handling and storage of seed for planting. He also argues that regardless of the lease's language, agricultural activities take place and are anticipated by the lease.

[¶17] We agree with the district court's conclusion that the property covered by the bin site lease is not agricultural land. Section 47-16-02, N.D.C.C., does not define "agricultural land." Additionally, our earlier cases interpreting N.D.C.C. § 47-16-02 have not defined or discussed "agricultural land." Those cases have decided whether a lease of agricultural land had a duration of more than ten years, see Lyons , 2014 ND 61, ¶ 14, 845 N.W.2d 1 ; Blixt , at 807 ; or was for an agricultural purpose. See Trauger v. Helm Bros., Inc. , 279 N.W.2d 406, 411 (N.D. 1979) (mining and removal of sand, gravel, and rock not an agricultural purpose); Berry-Iverson Co. of N.D., Inc. v. Johnson , 242 N.W.2d 126, 131-32 (N.D. 1976) (use of land for a...