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Markgraf v. Welker

Supreme Court of North Dakota

December 31, 2015

Kathleen Markgraf and Marilyn Shanahan, Plaintiffs and Appellees
Connie Welker, Vicki Ostrem, Margaret Rehmer, Robert Leroy Hannah, Jr., Robert Hannah, Cheryl Hannah, Donna Shilliam, William J. Hannah, Estate of William J. Hannah, Mary Hannah, Estate of Mary Hannah, Wilbert Hannah, Estate of Wilbert Hannah, Robert L. Hannah, Estate of Robert L. Hannah, Alan Hannah, Estate of Alan Hannah, Kathryn Hannah Nelson, Estate of Kathryn Hannah Nelson, Barbara Eggert, Estate of Barbara Eggert, Arnold Hannah, Estate of Arnold Hannah, Donald Hannah, Estate of Donald Hannah, Larry Erickson, Estate of Larry Erickson, and all other persons unknown claiming any estate interest in or lien or encumbrance upon, the real property described in the Complaint, whether as heirs, legatees, personal representatives, devisees, creditors, or otherwise, Defendants Connie Welker and Vicki Ostrem, Appellants

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Appeal from the District Court of Mountrail County, North Central Judicial District, the Honorable Richard L. Hagar, Judge.

Andrew D. Cook (argued) and Lukas D. Andrud (on brief), West Fargo, N.D., for plaintiffs and appellees.

Robert J. Pathroff (argued), Bismarck, N.D., and David T. Hermanson (appeared), Fargo, N.D., for appellants.

Gerald W. VandeWalle, C.J., Dale V. Sandstrom, Daniel J. Crothers, Lisa Fair McEvers, Daniel D. Narum, D.J.


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Gerald W. VandeWalle, Chief Justice.

[¶1] Connie Welker and Vicki Ostrem appealed from a summary judgment quieting title to certain Mountrail County mineral interests. Welker and Ostrem argue the district court erred in granting Kathleen Markgraf and Marilyn Shanahan's motion for summary judgment because Markgraf and Shanahan's claims are barred by the statute of limitations, the court relied on inadmissible evidence, and Markgraf and Shanahan did not prove the existence of an implied trust by clear and convincing evidence. We reverse and remand, concluding summary judgment was not appropriate.


[¶2] Markgraf and Shanahan brought an action against Welker and Ostrem to quiet title to minerals in and under property located in Mountrail County, described as:

Township 154 North, Range 93 West
Section 17: N1/2NW1/4, SW1/4NW1/4, NW1/4SW1/4
Township 156 North, Range 93 West
Section 25: SW1/4
Township 156 North, Range 92 West
Section 19: E1/2NW1/4, Lots 1 & 2
Lots 1, 2, 3, and 4, of Block 8, Original Townsite of Ross

Markgraf and Shanahan alleged W.J. Hannah owned 100% of the surface and minerals when he conveyed the property to " Arnold Hannah, Trustee" by grant deed in 1965, intending to create a family trust and appointing his son, Arnold Hannah, as trustee. Markgraf and Shanahan are descendants of Kathryn Nelson, W.J. Hannah's daughter and Arnold Hannah's sister. They claimed W.J. Hannah intended Arnold Hannah would hold the legal title to the property in trust for the benefit of himself; his siblings, Kathryn Nelson and Robert L. Hannah; and Margaret Rehmer, the only child of his deceased brother, Wilbert Hannah. They claimed Arnold Hannah held himself out as trustee in dealings related to the property, kept an accounting of the income and expenses related to the property, and made disbursements to the beneficiaries from the proceeds of the trust. They argued a resulting or constructive trust was created and Welker and Ostrem, as Arnold Hannah's heirs, do not have exclusive rights to the property. Welker and Ostrem answered and requested the complaint be dismissed.

[¶3] Welker and Ostrem moved for summary judgment, filing an affidavit and exhibits in support of the motion. They argued they were entitled to summary judgment because the 1965 grant deed transferring the property to " Arnold Hannah, Trustee" conveys the title to Arnold Hannah in his individual capacity, the word " Trustee" is surplusage under N.D.C.C. § 47-09-12, and Markgraf and Shanahan's claims for a resulting or constructive trust fail.

[¶4] Markgraf and Shanahan also moved for summary judgment, arguing a resulting or constructive trust was created

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when the property was conveyed to Arnold Hannah. They claimed that W.J. Hannah intended Arnold Hannah act as a trustee and manage the property for the benefit of the family and that Arnold Hannah acted as a trustee by managing the property, accounting for income and expenses, paying out disbursements from the proceeds of the property to family members, and paying himself a fee for his work related to the property. They filed supporting affidavits from Markgraf and their attorney, Andrew Cook, with attached exhibits.

[¶5] Welker and Ostrem opposed Markgraf and Shanahan's motion for summary judgment. They argued Markgraf and Shanahan's quiet title claims were barred by the twenty-year statute of limitations contained in N.D.C.C. § 28-01-04, an implied trust was not created, and there is not clear and convincing evidence of an understanding in 1965 that the mineral rights would be divided equally among W.J. Hannah's children.

[¶6] Welker and Ostrem moved to strike hearsay contained in Markgraf's affidavit under N.D.R.Civ.P. 56(e)(1). They claimed Markgraf's affidavit contained statements that were not based on personal knowledge and were inadmissible hearsay. They also moved to exclude the exhibits attached to Andrew Cook's ...

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