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Finstad v. Gord

Supreme Court of North Dakota

April 8, 2014

John Finstad and Lorie Finstad, Plaintiffs and Appellants
v.
James Gord and Wendy Gord, Beresford Bancorporation, Inc., People's Holding Company, and all other persons unknown claiming any estate or interest in, or lien or encumbrance upon, the property described in the Complaint, Defendants, James Gord and Wendy Gord, Appellees

Page 914

Appeal from the District Court of Ransom County, Southeast Judicial District, the Honorable Jay A. Schmitz, Judge.

Bruce A. Schoenwald, Moorhead, Minnesota, for plaintiffs and appellants.

Michael D. Nelson, West Fargo, N.D., for defendants and appellees.

Dale V. Sandstrom, Daniel J. Crothers, Lisa Fair McEvers, William A. Herauf, D.J., Gerald W. VandeWalle, C.J. The Honorable William A. Herauf, District Judge, sitting in place of Kapsner, J., disqualified.

OPINION

Page 915

Sandstrom, Justice.

[¶1] John and Lorie Finstad appeal from a summary judgment declaring James and Wendy Gord owners of farmland in Ransom County, North Dakota. We conclude a quitclaim deed executed by the Finstads and delivered to Beresford Bancorporation and People's Holding Company clearly and unambiguously gave Beresford all of the Finstads' right, title, and interest in the land. We therefore conclude that a subsequent quitclaim deed executed by Beresford to the Gords gave them ownership in the land. We affirm.

I

[¶2] The Finstads owned 400 acres of farmland in Ransom County. From 2002 to 2004, Beresford made a number of loans to the Finstads that were secured by the land. In July 2005, after Beresford began foreclosure proceedings on its mortgages, the Finstads filed for bankruptcy under Chapter 12, 11 U.S.C. § 1201 et seq. In October 2005, the Finstads entered into a settlement agreement with Beresford in the bankruptcy proceeding. On January 10, 2006, the parties executed a written version of the October agreement, detailing its terms. The settlement agreement was approved by the bankruptcy court on March 29, 2006.

[¶3] Meanwhile, on December 30, 2005, the Finstads executed a quitclaim deed of the land to Beresford (" Finstad-Beresford deed" ). The deed was recorded on January 20, 2006. The Finstads say the deed was delivered on December 30, 2005. The Gords say it was delivered on January 13, 2005. Regardless of the day of delivery, the fact that the Finstad-Beresford deed was delivered is not disputed. The effect of the deed, however, is at issue.

[¶4] James Gord stated in an affidavit that in the early part of 2006, he became acquainted with John Finstad, who was working on a pipeline crew in Illinois. He stated Finstad told him his daughter had recently died in a car accident and he was in danger of losing his farm in North Dakota. Gord stated in the affidavit that Finstad convinced them to lend him $525,000 to save the farm. Gord said Finstad did not disclose he had already deeded the farm to Beresford, in lieu of foreclosure, through a quitclaim deed. Gord also said he was not aware of a June 2005 appraisal of the Finstad farm made in connection with the Chapter 12 bankruptcy proceeding.

[¶5] On March 28, 2006, Beresford sent the Finstads a notice of default of the settlement agreement, stating that they owed $32,698.39 by March 15, 2006, and that the Finstads had 15 days to tender payment or their interest in the land would become null and void. On June 7, 2006, the Finstads issued a $375,000 promissory note to the Gords and entered into an agreement in which the Finstads mortgaged the farm to the Gords in exchange for a $375,000 loan. In addition, the Finstads executed a quitclaim deed of their interests in the farm to the Gords, which was also dated June 7, 2006. In October 2006, the Finstads paid Beresford $345,000 to be applied against their outstanding obligation.

Page 916

Beresford sent additional notices of default in March 2007, March 2008, and June 2008. In July 2008, Beresford sent the Finstads a " Notice of Termination of Interest in Real Estate and Notice of Intentions to Sell Real Estate by Public Auction." ...


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