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Four Season's Healthcare Center, Inc. v. Linderkamp

Supreme Court of North Dakota

September 4, 2013

Four Season's Healthcare Center, Inc., Plaintiff and Appellee
v.
Elden Linderkamp and Rita Linderkamp, Defendants, Third-Party Plaintiffs and Appellants
v.
Louis Linderkamp, Carl Linderkamp, Gene Linderkamp, Dennis Linderkamp and Dawn Herrmann, Third-Party Defendants Dennis Linderkamp, as Personal Representative of the Estates of Earl Linderkamp and Ruth Linderkamp, deceased, Plaintiffs and Appellees
v.
Elden Linderkamp and Rita Linderkamp, Defendants and Appellants

Appeals from the District Court of Sargent County, Southeast Judicial District, the Honorable Daniel D. Narum, Judge.

Roger J. Minch for plaintiff and appellee Four Season's Healthcare Center, Inc.

David A. Tschider for plaintiffs and appellees Dennis Linderkamp, as Personal Representative of the Estates of Earl Linderkamp and Ruth Linderkamp, deceased.

Tracey R. Lindberg for defendants, third-party plaintiffs and appellants Elden Linderkamp and Rita Linderkamp.

OPINION

Kapsner, Justice.

[¶ 1] Elden and Rita Linderkamp appeal from a judgment requiring Elden Linderkamp to pay Four Season's Healthcare Center, Inc., $104, 276.62 for nursing home care provided to his parents, invalidating a contract for deed and warranty deed conveying land from the parents to Elden and Rita Linderkamp, authorizing the parents' personal representative to administer the land in the probate of the parents' estates, and allowing Elden and Rita Linderkamp a net claim of $45, 000 against the parents' estates. We hold the district court did not clearly err in finding there was no credible evidence of a claimed oral agreement for Earl Linderkamp to compensate Elden Linderkamp for improvements to the land as part of the consideration for the contract for deed and warranty deed and did not clearly err in finding there was no credible evidence to support Elden Linderkamp's claim he made more than $100, 000 in improvements to the land as part of the consideration for the deeds. We further conclude the district court erred in declining to rule on an issue about all of the children's liability for their parents' nursing home debt under N.D.C.C. § 14-09-10. We affirm in part, reverse in part, and remand for further proceedings.

I

[¶ 2] Earl and Ruth Linderkamp were the parents of Dawn Herrmann and Elden, Louis, Carl, Gene, and Dennis Linderkamp. Earl and Ruth Linderkamp owned a quarter section of land in Sargent County, which they farmed until 1975 when they moved to a residence in Lisbon. They thereafter leased the land and buildings to Elden and Dennis Linderkamp, who farmed the land under an oral partnership agreement. Elden and Dennis Linderkamp both lived on the farm until 1983, when Dennis Linderkamp vacated the premises after Elden Linderkamp married Rita Linderkamp and they resided together on the farm. Dennis Linderkamp continued farming with Elden Linderkamp under the oral partnership arrangement until 1993, when disagreements resulted in a dissolution of the partnership. Thereafter, Elden Linderkamp continued farming the land under a lease agreement with his parents.

[¶ 3] According to Elden Linderkamp, in 1977 he asked Earl Linderkamp about purchasing the property, but his father would not sell the property to him at that time. Elden Linderkamp claimed, however, he entered into an oral agreement with his father in 1977 for reimbursement of his costs and expenses for improvements to the property as consideration for the purchase price when he ultimately bought the property from his parents. Elden Linderkamp specifically testified the agreement was that he "would put up the price of the materials and the labor and that when we got around to selling the land, if I didn't get to buy it, [his father] would have to take and pay me outright." Elden Linderkamp claimed he spent between $120, 000 and $130, 000 for improvements to the property, including repairing the house and other buildings, erecting structures for a pig operation, removing outdated buildings, landscaping, and replacing a water supply system.

[¶ 4] Elden Linderkamp claimed Earl Linderkamp approached him in February 2006 about selling the property, and Elden Linderkamp made a handwritten offer of $50, 000 in addition to the costs of the improvements to the property under the prior oral agreement. In August 2006, Earl, Ruth, Elden, and Rita Linderkamp went to the office of attorney Wayne Jones, where Earl and Ruth Linderkamp executed a contract for deed conveying the property to Elden and Rita Linderkamp for a stated purchase price of $50, 000. Elden Linderkamp testified his handwritten offer of $50, 000 and other consideration already paid was given to Jones, and Jones testified Elden Linderkamp's handwritten offer was part of an office file with the contract for deed. Elden Linderkamp testified his parents were aware of what they were doing when they executed the contract for deed, his father was aware of the costs of Elden Linderkamp's improvements to the property, and his parents had no plans for entering a nursing home and had considered renting an apartment in Cogswell in September 2006. A February 2009 appraisal reflected a market value of $152, 000 for the land in August 2006. The parents' financial records indicated that in August 2006, they had more than $7, 000 in their checking account and more than $83, 000 in other accounts, plus social security benefits and the money from the sale of the land.

[¶ 5] In October 2006, Earl and Ruth Linderkamp were hospitalized and Four Season's began providing them nursing home care after their doctor required discharge to a nursing home.

[¶ 6] In November 2006, Elden and Rita Linderkamp took Earl and Ruth Linderkamp from the nursing home to the office of attorney Earl Anderson, where the parents executed a warranty deed conveying the land to Elden and Rita Linderkamp. The warranty deed was prepared by Anderson and stated the "full consideration" for the property was $50, 000. Anderson testified that Elden Linderkamp told him about the terms of the conveyance, including the prior oral agreement to compensate Elden Linderkamp for improvements to the property, and that Earl Linderkamp reiterated those terms outside the presence of Elden Linderkamp.

[¶ 7] The parents lived in Four Season's nursing home until Ruth Linderkamp died in December 2009, and Earl Linderkamp died in September 2010. After their deaths, Four Season's sued Elden and Rita Linderkamp to set aside the land transfer as a fraudulent conveyance under N.D.C.C. ch. 13-02.1 and to recover more than $93, 000 in unpaid nursing home care provided to the parents. Elden and Rita Linderkamp brought a third-party claim against Elden Linderkamp's siblings for contribution for the unpaid nursing home care provided to the parents. The parents' personal representative thereafter sued Elden and Rita Linderkamp, claiming the parents lacked capacity to execute the contract for deed and the warranty deed. The district court entered partial summary judgment on Four Season's claim for the unpaid nursing home care provided to the parents, concluding Elden Linderkamp was liable for his parents' unpaid nursing home care under N.D.C.C. § 14-09-10. The court reserved for trial the other children's liability for their parents' nursing home debt under that statute.

[ΒΆ 8] The actions were thereafter consolidated for trial and, after a bench trial, the district court concluded the conveyance from Earl and Ruth Linderkamp to Elden and Rita Linderkamp was a void fraudulent transfer under N.D.C.C. ch. 13-02.1, because the parents did not receive reasonably equivalent value in exchange for the property and the conveyance was made when the parents were about to incur debt that was clearly beyond their ability to pay. The court said the parol evidence rule and the statute of frauds barred evidence about an oral agreement for improvements to the land dating back to the 1970s as part consideration for the purchase price for the property, and even if that evidence was not barred, there was no credible evidence of an oral agreement between Earl and Elden Linderkamp, or credible evidence that Elden Linderkamp's improvements to the property were valued at more than $100, 000. The court said that although there was evidence Earl Linderkamp was declining mentally, the evidence regarding Ruth Linderkamp's lack of capacity at the time of, and prior to, the contract for deed and warranty deed was compelling. The court found she was suffering from seriously debilitating dementia when she signed the contract for deed and warranty deed and her incapacity rendered the transfer void. The court ruled the parties' other claims were moot. The court's judgment required Elden ...


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