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In re Estate of Grengs

Supreme Court of North Dakota

June 11, 2015

In the Matter of the Estate of Anita K. Grengs, Deceased; Greg Grengs, Personal Representative, Petitioner and Appellant
v.
David Lakefield, Successor Personal Representative, Gary Grengs, Karen Marsland, and Julie Rostad, Respondents Karen Marsland, and Julie Rostad, Appellees

Page 425

[Copyrighted Material Omitted]

Page 426

Appeal from the District Court of Renville County, Northeast Judicial District, the Honorable Michael G. Sturdevant, Judge.

Rebecca S. Thiem, Bismarck, N.D., for petitioner and appellant.

Sophie Morgan (argued) and Ross H. Espeseth (on brief), Bismarck, N.D., for respondent and appellee Karen Marsland.

Brittany M. Johs (argued) and Kerry S. Rosenquist (appeared), Grand Forks, N.D., for respondent and appellee Julie Rostad.

Carol Ronning Kapsner, Lisa Fair McEvers, Daniel J. Crothers, Dale V. Sandstrom, Gerald W. VandeWalle, C.J. Opinion of the Court by Kapsner, Justice.

OPINION

Page 427

Carol Ronning Kapsner, Justice.

[¶1] Greg Grengs appeals from district court orders interpreting Anita Grengs' will and approving the final accounting and distribution of Anita Grengs' estate. We hold the option to purchase provision of the will is ambiguous and evidence indicates Anita Grengs intended Greg Grengs have an option to purchase property that was not conditioned on the landowner's willingness to sell, and the evidence supports the district court's interpretation of the option to lease provision of the will. We affirm in part and reverse in part.

I

[¶2] Anita Grengs had five children, Julie Rostad, Jay Grengs, Karen Marsland, Gary Grengs, and Greg Grengs. Anita Grengs owned farmland in Renville County, and Greg Grengs farmed the land on a crop share basis.

[¶3] On March 27, 2001, Anita Grengs executed a Last Will and Testament, devising specific portions of the farmland to each of her children. The will required that each of the deeds conveying property to Rostad, Jay Grengs, and Marsland include options to purchase in favor of Greg and Gary Grengs. The will also included a provision giving Greg and Gary Grengs the option to lease the property deeded to Rostad, Jay Grengs, and Marsland. Anita Grengs died in September 2009. Jay Grengs passed away in 2002, before Anita Grengs' death.

[¶4] In October 2009, an application for informal probate of the will was filed. Greg Grengs was initially appointed as personal representative of Anita Grengs' estate, but he later resigned and a successor personal representative was appointed.

[¶5] On January 11, 2012, the personal representative moved for an order directing him to sell to Greg Grengs the property Jay Grengs was to receive under the will. Rostad and Marsland objected to the sale of the land. Greg Grengs filed a brief in support of the personal representative's motion, arguing the will included an option allowing him to purchase the property. He also filed a notice of exercise of options, stating he was exercising the option to purchase the property left to Rostad, Marsland, and Jay Grengs and he was also exercising the option allowing him to lease the property.

[¶6] An evidentiary hearing on the personal representative's motion was held on February 27, 2012. On April 16, 2012, the district court entered an order approving the sale of the property that was left to Jay Grengs in the will. The court found the bequest to Jay Grengs lapsed because he died before Anita Grengs and it was in the estate's best interest that the property

Page 428

be sold to Greg Grengs. The court ordered the personal representative to sell the surface interest in the property to Greg Grengs. The court reserved the issue of whether Greg Grengs was entitled to purchase the mineral interests under his option to purchase.

[¶7] On March 21, 2012, Greg Grengs petitioned for declaratory judgment, requesting the court determine his option rights under the will. He argued Anita Grengs conveyed certain property to each child under the will, but the conveyance was subject to an option in his favor allowing him to purchase the property and the option to purchase did not require the landowner to be willing to sell the property. He claimed the option to purchase was ambiguous and should be interpreted consistent with Anita Grengs' intent that he have an irrevocable option. He alternatively requested the court reform the will consistent with Anita Grengs' intent. He later amended his petition to request the court determine whether the option to purchase applies to the mineral interests. Marsland and Rostad filed briefs opposing Greg Grengs' petition.

[¶8] In an order dated April 16, 2012, the court denied the relief Greg Grengs requested in his petition for declaratory judgment. The court found the option to purchase is not ambiguous, the option is conditioned on the landowner's desire to sell the property, reformation of the will was not appropriate because the court was not convinced there was a mistake of fact or law, and the option to purchase did not include the option to purchase mineral interests.

[¶9] Greg Grengs moved to vacate the order denying his petition for declaratory judgment, arguing the court entered the order sua sponte without giving the parties notice and without allowing him to present argument and testimony. The court granted Greg Grengs' motion and vacated the order.

[¶10] On February 26, 2013, Greg Grengs filed a second amended petition for declaratory judgment to construct and reform the will. He requested the court interpret the ambiguous option to purchase provision consistent with Anita Grengs' intent, reform the option to purchase provision to correct mistaken language suggesting the option to purchase was conditioned on a willing seller, declare the option to purchase includes the option to purchase mineral interests, and declare he has an unconditional option to lease the property conveyed to Marsland and Rostad.

[¶11] A hearing on the second amended petition for declaratory judgment was held on March 21, 2013. Marsland filed a post-hearing brief, arguing the will is unambiguous and requires the landowner be willing to sell the property before Greg Grengs can exercise his option to purchase. Greg Grengs filed a brief arguing the option to purchase is ambiguous and Anita Grengs' intent was to grant him an option to purchase that was not conditioned on the owner's willingness to sell. Greg Grengs also filed a brief about the crop lease and the interpretation of the option to lease provision of the will.

[¶12] On April 19, 2013, the court entered an order deciding the issues raised in Greg Grengs' second amended petition for declaratory judgment. The court interpreted the will and concluded the option to purchase is not ambiguous, Greg Grengs has the right to purchase the property at fair market value when the landowner decides to sell, there is no requirement that the mineral interests be sold with the surface interest, and Greg Grengs' option ...


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