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Hall v. Malloy

Supreme Court of North Dakota

April 28, 2015

Todd Hall, Plaintiff and Appellee
v.
Howard L. Malloy, Trustee of the Harry L. Malloy Irrevocable Family Mineral Trust, and Lorraine D. Malloy, Defendants and Appellants

Appeal from the District Court of Dunn County, Southwest Judicial District, the Honorable Zane Anderson, Judge.

Derrick L. Braaten, Bismarck, N.D., for plaintiff and appellee.

Sean O. Smith, Bismarck, N.D., for defendants and appellants.

Dale V. Sandstrom, Lisa Fair McEvers, Gerald W. Vande Walle, C.J. Daniel J. Crothers, concur in the result.

OPINION

Page 515

Sandstrom, Justice

[¶1] Howard L. Malloy, as trustee of the Harry L. Malloy Irrevocable Family Mineral Trust, and Lorraine Malloy (collectively referred to as the " Family Mineral Trust" ) appeal from a summary judgment determining they have no right, title, or interest in disputed mineral interests in a tract of land in Dunn County and quieting title in the disputed mineral interests to Todd Hall. We conclude Harry L. and Lorraine Malloy's 1983 divorce judgment did not convey Harry L. Malloy's after-acquired title in the disputed mineral interests to Lorraine Malloy. We affirm.

I

[¶2] At issue in this case is the number of mineral acres owned by Todd Hall in a tract of land in Dunn County as a result of a conveyance from Harry L. Malloy to Todd Hall's predecessor in interest, Edwin Hall. Todd Hall claims he owns 9 net mineral acres in the land and the Family Mineral Trust claims he owns 4.5 net mineral acres in the land. To understand the parties' claims, we outline the chain of title for the disputed mineral interests.

[¶3] Before May 1, 1982, Harry L. Malloy owned 90 net mineral acres in the Dunn County land in his individual capacity. On May 1, 1982, Harry L. Malloy, Janet L. Holt, and Gordon O. Holt executed a quit claim deed conveying all their interest in tracts of land in Dunn County, including Harry L. Malloy's 90 net mineral acres, to Harry L. Malloy and Janet L. Holt as trustees for the Harry L. Malloy Trust and the Janet L. Malloy Holt Trust. The quit claim deed was recorded in the office of the Dunn County Register of Deeds in August 1982, and resulted in Harry L. Malloy and Janet L. Holt owning the 90 net mineral acres in the Dunn County tract of land in their capacity as trustees for the trusts.

[¶4] In February 1983, Harry L. Malloy and Lorraine Malloy were divorced by a judgment incorporating a settlement agreement. The divorce judgment said it settled the parties' respective property rights " which either of them now has, or may hereafter have, or may claim to have

Page 516

against the other, or in or to any property of the other of every kind, whether real, personal or mixed, whether now or hereafter owned or possessed by either of them." The judgment stated Harry L. Malloy had " represented that he owns 2,222 net mineral acres" in land in Dunn County, including the 90 net mineral acres in the tract of land involved in this action, and provided Lorraine Malloy was " to receive one-half of [his] interest in and to the mineral acres." Under the judgment, Harry L. Malloy agreed to execute a deed to Lorraine Malloy for one-half of his interest in the mineral acres in a form satisfactory to her. The judgment provided if either party failed to execute necessary documents to vest titles in the respective parties, the judgment constituted a full and present transfer of all rights designated to be relinquished. The judgment was recorded in the office of the Dunn County Register of Deeds in February 1983.

[¶5] In November 1983, Harry L. Malloy executed a quit claim mineral deed " sell[ing], remis[ing], releas[ing] and quit claim[ing] . . . an undivided one-half of [his] present interest" in the 90 net mineral acres to Lorraine Malloy. The quit claim deed was recorded in the office of the Dunn County Register of Deeds in November 1983.

[¶6] In January 1995, Harry L. Malloy, individually, and Harry L. Malloy and Janet L. Holt, as trustees for the Harry L. Malloy Trust and the Janet L. Malloy Holt Trust, executed a quit claim deed " quit claim[ing]" all their interest in the disputed mineral interests to themselves individually. That quit claim deed was recorded in the office of the Dunn County Register of Deeds in July 1995. The Family Mineral Trust claims that transaction resulted in Harry L. Malloy owning 45 net mineral acres and Lorraine Malloy owning 45 net minerals acres in the Dunn County tract of land under the after-acquired title doctrine.

[¶7] In September 1997, Harry L. Malloy and Janet L. Holt executed separate quit claim deeds " quit claim[ing]" the Dunn County land to Edwin Hall, but excepting and reserving 90 percent of all minerals they then owned in the land. Those quit claim deeds were recorded in the office of the Dunn County Register of Deeds in October 1997. Todd Hall claims Harry L. Malloy then owned 90 net mineral acres in the Dunn County land and that transaction conveyed 10 percent of those mineral acres, 9 mineral acres, to his predecessor in interest, Edwin Hall. The Family Mineral Trust claims that conveyance resulted in Edwin Hall's owning 10 percent of 45 net mineral acres, or 4.5 mineral acres.

[¶8] In September 2004, Edwin and Jean Hall, as husband and wife, executed a contract for deed conveying their Dunn County land to Todd Hall. The contract for deed was recorded in the Dunn County recorder's office in September 2004. In September 2007, Harry and Carol Malloy, as husband and wife, executed a mineral deed quit claiming all their mineral interests in the Dunn County land to the Harry L. Malloy Irrevocable Family Mineral Trust, and the deed was recorded in the Dunn County recorder's office in September 2007. In October 2012, Edwin and Jean Hall executed a warranty deed conveying the Dunn County land to Todd Hall, and the deed was recorded in the Dunn County recorder's office in October 2012.

[¶9] In June 2013, Todd Hall sued the Harry L. Malloy Irrevocable Family Mineral Trust and Lorraine Malloy to quiet title to the disputed mineral interests, alleging that he owned 9 net mineral acres in the Dunn County land through conveyances from Harry L. Malloy in his individual

Page 517

capacity. Todd Hall claimed Harry L. Malloy's earlier purported conveyances of those mineral interests in his individual capacity to Lorraine Malloy by the 1983 divorce judgment and the 1983 quit claim deed did not convey the mineral interests to her because Harry L. Malloy then owned the interests in his capacity as trustee for the Harry L. Malloy Trust. The Family Mineral Trust answered, asserting Todd Hall owned 4.5 net mineral acres in the Dunn County land.

[¶10] The district court granted Hall summary judgment, concluding that in 1983, Harry L. Malloy owned the disputed mineral interests in his capacity as trustee for the Harry L. Malloy Trust and the 1983 divorce judgment and quit claim deed did not convey the disputed mineral interests to Loraine Malloy. The court also concluded the after-acquired title doctrine did not vest title in the disputed mineral interests in Lorraine Malloy when Harry L. Malloy reacquired them in his individual capacity in 1995. The court explained the 1983 divorce judgment did not purport to convey the mineral interests by a " proper instrument" under N.D.C.C. § 47-10-15, because:

The statute, [N.D.C.C. § 47-10-15], requires a " proper instrument" to have been used to convey title. Although no definition is provided as to what a " proper instrument" is, the divorce judgment, as discussed above, is invalid as to conveying title to the Mineral Estate to Lorraine since the Trustee held title and was not a party to the divorce. As such, since the method of conveyance was invalid, the after-acquired title statute does not apply. Therefore, title to the Mineral Estate did not vest in Lorraine at the time of the divorce or in 1995 when Harry acquired the property individually.

The court quieted title to Todd Hall in 9 net mineral acres in the Dunn County land.

[¶11] The district court had jurisdiction under N.D. Const. art. VI, § 8, and N.D.C.C. § 27-05-06. The Family Mineral Trust's appeal is timely under N.D.R.App.P. 4(a). This Court has jurisdiction under N.D. Const. art. VI, ...


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