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Knorr v. Norberg

Supreme Court of North Dakota

December 7, 2015

Robert D. Knorr and Cheri Knorr, Plaintiffs and Appellees
v.
Jon Norberg and Alonna Norberg, Defendants Jon Norberg, Appellant

Appeal from the District Court of McLean County, South Central Judicial District, the Honorable Thomas J. Schneider, Judge.

Sheldon A. Smith (argued) and David J. Smith (on brief), Bismarck, N.D., for plaintiffs and appellees.

James R. Bullis (argued) and Michael S. Montgomery (on brief), Fargo, N.D., for defendant and appellant Jon Norberg.

OPINION

Page 324

Dale V. Sandstrom, J.

[¶1] Jon Norberg appeals a district court judgment allowing his former parents-in-law, Robert and Cheri Knorr, to buy back certain real property under an alleged oral lease. He argues the district court erred in concluding the Knorrs established promissory estoppel and constructive trust. We affirm the judgment, concluding the district court's findings of promissory estoppel were not clearly erroneous.

Page 325

I

[¶2] In 2004, Robert and Cheri Knorr purchased a lot and constructed a home on Lake Audubon in McLean County. According to the Knorrs, the home was built to accommodate Cheri Knorr's Parkinson's disease and was intended to be their retirement home. When the real estate market declined, the Knorrs say they were forced to mortgage the lake property as well as some of their other property to stay current on their loan obligations, and they were subsequently unable to make the mortgage payments on the property and reached out to family members for assistance. The Knorrs' eldest daughter, Alyssa Hollier, and her husband purchased a home owned by the Knorrs in Arizona and leased the property to the Knorrs with an option to repurchase. According to the Knorrs, a similar agreement was reached with another daughter and her husband, Alonna and Jon Norberg, regarding the lake home and property. The Norbergs allegedly agreed in late 2010 to purchase the lake home and lease it back to the Knorrs with an option to repurchase. In February 2011, the Knorrs executed a lease containing an option to purchase the home, and sent it to the Norbergs for their signature. Alonna Norberg signed the agreement and says she witnessed Jon Norberg sign it, but that document was never found. After the transfer, the Knorrs continued to live in the home, making monthly payments to the Norbergs in the amount of the monthly mortgage payment, paying all real estate taxes on the property, and paying all utilities, insurance, and other costs associated with the home.

[¶3] In December 2011, the Knorrs notified the Norbergs of their intent to exercise the option to repurchase. Jon Norberg refused to recognize the option. By this time, Jon and Alonna Norberg had separated. After trial in January 2013, the district court, finding clear and unequivocal evidence of an oral option agreement sufficient to constitute part performance removing the contract from the statute of frauds, concluded the Knorrs were entitled to buy back the property in accordance with the parties' oral agreement. On appeal, we held the Knorrs' conduct was not exclusively consistent with the existence of an option to purchase and concluded the doctrine of partial performance was not sufficient to take the oral contract out of the statute of frauds. Knorr v. Norberg, 2014 ND 74, ¶ 14, 844 N.W.2d 919. We reversed and remanded for consideration of the Knorrs' alternative theories of promissory estoppel and constructive trust. Id. at ¶ ¶ 15-16.

[¶4] On remand, after an evidentiary hearing, the district court found the Knorrs had satisfied their burden of establishing promissory estoppel and a constructive trust, and further ordered entry of judgment recognizing the Knorrs' option to repurchase the lake property.

[¶5] The district court had jurisdiction under N.D. Const. art. VI, § 8, and N.D.C.C. § 27-05-06. The appeal was timely under N.D.R.App.P. 4(a). This Court has jurisdiction under N.D. Const. art. VI, § § 2 and 6, and N.D.C.C. § 28-27-01.

II

[¶6] On appeal, Jon Norberg argues the district court erred in concluding the Knorrs established promissory estoppel ...


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