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In re Estate of Vaage

Supreme Court of North Dakota

February 18, 2016

In the Matter of the Estate of Lowell H. Vaage, Deceased;
v.
The State of North Dakota, the Estate of Kenneth Vaage; and his surviving widow, Verna L. Vaage; and their children; James Vaage, Gregory Vaage; Bruce Vaage; and Kathleen M. Hettenbough; the Estate of Donald Vaage, and his surviving widow, Mae L. Vaage, and their child, Gary Vaage-if living, and all other persons interested in their estates, if deceased; and all other persons unknown claiming any estate or interest in or lien or encumbrance on the property described in the Complaint, Defendants James Vaage, Gregory Vaage and Bruce Vaage, Appellees Correne Vaage, as Special Personal Representative of the Estate of Lowell H. Vaage, Plaintiff and Appellant

Page 528

Appeal from the District Court of Burke County, North Central Judicial District, the Honorable Gary H. Lee, Judge.

Larry M. Baer (argued), West Des Moines, Iowa, and Rauleigh D. Robinson (appeared), Menoken, N.D., for plaintiff and appellant.

Scott M. Knudsvig (argued) and Matthew H. Olson (on brief), Minot, N.D., for defendants and appellees.

Lisa Fair McEvers, Daniel J. Crothers, Dale V. Sandstrom, Carol Ronning Kapsner, Gerald W. VandeWalle, C.J.

OPINION

Page 529

Lisa Fair McEvers, Justice.

[¶1] Correne Vaage, surviving spouse and special personal representative of the Estate of Lowell H. Vaage (" Lowell Vaage estate" or " Estate" ), appeals from a judgment dismissing its claim to reform a personal representative's deed issued by the John Vaage estate to Lowell Vaage. We affirm, concluding the district court's finding the Lowell Vaage estate failed to prove fraud or mistake sufficient to reform the personal representative's deed was not clearly erroneous.

I

[¶2] Lowell Vaage's father, John Vaage, owned 600 surface acres and 275 mineral acres in Burke County. In 1973, John Vaage and Lowell Vaage entered into a contract for deed for the sale of the real property. Within the legal description, the contract for deed stated " excepting and reserving, an undivided one-half interest in and to all the . . . minerals" beneath the property. The contract also provided the final payment was due on or before January 15, 1983, and a warranty deed would be issued to Lowell Vaage upon satisfaction of the contract.

[¶3] John Vaage died on May 23, 1983, before Lowell Vaage satisfied the contract for deed. One of John Vaage's other sons, Kenneth Vaage, was appointed personal representative of John Vaage's estate. After Lowell Vaage made the final payment on the contract for deed in March 1984, Kenneth Vaage issued a personal representative's deed to Lowell Vaage for the property. Following the legal description, the deed stated " [e]xcepting and reserving an undivided one-half interest in and to the remaining . . . minerals" beneath the property. In May 1984, Kenneth Vaage issued another personal representative's deed conveying 137.5 mineral acres to John Vaage's three sons, Kenneth Vaage, Donald Vaage, and Lowell Vaage, in equal proportions. Lowell Vaage died in April 2003.

[¶4] In 2012, the Lowell Vaage estate sued the heirs of Kenneth Vaage and Donald Vaage (" Vaage defendants" ), claiming the March 1984 personal representative's deed, by reserving a one-half interest in the remaining minerals, did not conform to the language of the 1973 contract for deed, which reserved a one-half interest in all minerals beneath the property. The Estate alleged that, under the 1973 contract for deed, John Vaage intended to convey all 275 mineral acres under the property to Lowell Vaage. The Estate requested the court to reform the personal representative's deed and declare the Estate the owner of all 275 mineral acres.

[¶5] The parties agreed that, at a minimum, the March 1984 personal representative's deed conveyed 137.5 mineral acres to Lowell Vaage and he received 45.8333 mineral acres under the May 1984 personal representative's deed. The parties thus agree that, out of the 275 mineral acres owned by John Vaage, the Lowell Vaage Estate owns 183.3333 and 91.6666 are in dispute.

[¶6] Both parties moved for summary judgment in early 2013. The Estate argued the March 1984 personal representative's deed was fraudulently altered and must be reformed to conform to the 1973 contract for deed. The Vaage defendants argued only the March 1984 personal representative's deed must be looked at to ascertain John Vaage's intent. The district court denied both parties' motions. The court concluded neither summary judgment nor reformation would be granted

Page 530

to either party. The court also concluded the personal representative of John Vaage's estate was bound to honor the intent of John Vaage as stated in the 1973 contract for deed, and the mineral reservation language of the March 1984 personal representative's deed did not mirror the language of the 1973 contract for deed.

[¶7] Both parties moved for summary judgment again in late 2013. The Estate argued the Duhig rule, under the March 1984 personal representative's deed, precluded a reservation of minerals to the John Vaage estate. The Estate alternatively argued the language of the purported reservation clause contained in either the 1973 contract for deed or the March 1984 personal representative's deed is vague, ambiguous, and unenforceable. The Estate claimed for purposes of the motion, it made no difference whether any fraud was committed or whether a basis existed to reform the March 1984 personal representative's deed. The Vaage defendants argued the Duhig rule did not apply to the March 1984 personal representative's deed, and the deed is not vague or ambiguous. The district court denied the motions, concluding the Estate's alternative arguments precluded summary judgment. The court also concluded material issues of fact existed, which precluded summary judgment.

[¶8] At trial, the Estate argued the March 1984 personal representative's deed was fraudulently altered. To support this argument, the Estate provided testimony from a document examiner that the words " the remaining" in the personal representative's deed appeared to be out of alignment and may have been inserted into the deed at a later date. The document examiner testified he could not say when the words were inserted or why they may have been inserted at a later date. He also testified he could not rule out an innocent explanation for the words appearing out of alignment.

[¶9] The Estate also offered the pre-trial deposition testimony of Correne Vaage to support its fraud argument. She testified the recorded March 1984 personal representative's deed was not the same deed she saw in the attorney's office on the day Lowell Vaage made the final payment on the contract for deed. She testified her recollection was the language of the deed was identical to the language of the contract for deed. She testified she believed ...


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