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Markgraf v. Welker

Supreme Court of North Dakota

September 7, 2017

Kathleen Markgraf and Marilyn Shanahan, Plaintiffs and Appellees
v.
Connie Welker, Vicki Ostrem, Defendants and Appellants and 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, Robert L. Hannah, Estate of Robert L. Hannah, Alan Hannah, Estate of Alan Hannah, 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

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

          Andrew D. Cook, West Fargo, ND, for plaintiffs and appellees.

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

          OPINION

          VandeWalle, Chief Justice.

         [¶ 1] Connie Welker and Vicki Ostrem appealed from a district court judgment deciding ownership of mineral interests in Mountrail County. Welker and Ostrem argue the court erred in finding that a resulting trust exists and that the trust was not repudiated. We conclude the district court did not err in finding a resulting trust exists and Welker and Ostrem failed to establish the trustee's repudiation of the trust. We affirm.

         I

         [¶ 2] Kathleen Markgraf and Marilyn 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. 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 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.

         [¶ 5] Welker and Ostrem opposed Markgraf and Shanahan's motion. They argued Markgraf and Shanahan's quiet title claim was 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] After a hearing, the district court granted Markgraf and Shanahan's motion for summary judgment and denied Welker and Ostrem's motion. The court concluded there was clear and convincing evidence that a resulting trust was created when the property was conveyed to Arnold Hannah. Welker and Ostrem appealed, and this Court reversed and remanded, concluding summary judgment was not appropriate because reasonable differences of opinion existed about the inferences to be drawn from the evidence and there was conflicting evidence which required the court to weigh the evidence or attempt to discern the truth of the matter. Markgraf v. Welker, 2015 ND 303, 873 N.W.2d 26.

         [¶ 7] On remand, the parties submitted a stipulated statement of facts and exhibits. The district court held a bench trial and entered judgment quieting title to the minerals as Markgraf and Shanahan requested. The district court considered this Court's prior decision and found a resulting trust was created, the trust ...


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