from the District Court of Golden Valley County, Southwest
Judicial District, the Honorable Dann E. Greenwood, Judge.
P.B. Zasada (argued) and Cassandra A. Marka (on brief), Grand
Forks, ND, for plaintiff and appellee.
Spencer D. Ptacek (argued) and Lawrence Bender (appeared),
Bismarck, ND, for defendants, third-party plaintiffs and
VandeWalle, Chief Justice.
1] Donnell and Jeanne Michels appealed from a judgment
partitioning real property between the Michels and Beach
Railport, LLC. We conclude that the district court erred by
applying an incorrect legal standard to review and adopt the
partition referee's report and that the court erred by
not holding an evidentiary hearing. We reverse and remand for
2] In 2015, Beach Railport commenced this action against the
Michels, who are husband and wife, for the partition of real
property in Golden Valley County. Beach Railport and the
Michels each own an undivided one-half interest in the
subject property, consisting of two tracts of land totaling
eighty acresthe "North Forty" acres and the
"South Forty" acres. Donnell Michels has used the
property for agricultural purposes. Beach Railport acquired
its interest in the North Forty and various other tracts of
land around the subject property as part of its planned
construction of a rail trans-load facility. It also sought
and obtained changes in zoning for certain property parcels.
Beach Railport's construction plan did not include
development on the South Forty acres.
3] In January 2016, Beach Railport and the Michels entered
into a stipulation agreement to have the district court
appoint attorney Steven Wild to serve as the sole referee to
partition the real property. The court entered an order based
on the stipulation, declaring the Michels and Beach Railport
each owned an undivided one-half interest in the property at
issue and appointing Wild as the sole referee to partition
the property into two parcels between them according to their
respective interest in the property. The court ordered the
referee to view the real property and partition it in
accordance with the law governing partition. If a fair and
equitable division of the land could not be made, the court
ordered the referee to decide whether the parties' shares
could be equalized by payment of owelty and to report the
amount to be paid. "Owelty" is defined as "1.
Equality as achieved by a compensatory sum of money given
after an exchange of parcels of land having different values
or after an unequal partition of real property. 2. The sum of
money so paid." Black's Law Dictionary 1279
(10th ed. 2014).
4] The Michels and Beach Railport each hired appraisers to
appraise the property. The referee subsequently viewed the
property and reviewed the parties' appraisals and their
written submissions that described their respective positions
on how the property should be partitioned. In July 2016, the
referee filed his report with the district court. In the
report the referee decided that the property should be
partitioned along the east-west quarter-quarter line, with
Beach Railport receiving the North Forty and the Michels
receiving the South Forty of the property. The referee
concluded this partition was an equitable division of the
property and neither party would be required to pay
compensation to the other.
5] Beach Railport moved the district court to confirm the
referee's report. The Michels responded and objected to
Beach Railport's motion for confirmation, submitting
various exhibits and affidavits in opposition. The Michels
contended that the referee did not make an equitable
distribution of the property because the partition was based
on erroneous assumptions and not supported by evidence. They
claimed that each party should receive equal amounts of
property zoned industrial and zoned agricultural; that the
court should set aside the referee's report or modify it
in an east-west division; and that the matter should be tried
in district court.
6] In October 2016, the district court held a hearing on
Beach Railport's motion to confirm the referee's
report. The Michels argued, among other things, that a trial
was necessary because of disputed issues of fact about
valuation of the property. The court denied the Michels an
evidentiary hearing and confirmed the referee's report,
adopting the report's findings and conclusions in its
findings of fact, conclusions of law, and order for judgment.
A judgment of partition was entered.
7] The Michels argue the district court abused its discretion
in allotting the North Forty to Beach Railport and the South
Forty to them.
8] Chapter 32-16, N.D.C.C., provides a special statutory
proceeding and governs the partition of real property.
See also N.D.R.Civ.P. 81(a), Table A (containing
"a nonexclusive list of statutes pertaining to"
special statutory procedures). Section 32-16-01, N.D.C.C.,
authorizes proceedings to partition property "according
to the respective rights of the persons interested therein
and for a sale of such property or a part thereof, if it
appears that a partition cannot be made without great
prejudice to the owners." If the property is "so
situated that partition cannot be made without great
prejudice to the owners, the court may order sale" of
the property. N.D.C.C. § 32-16-12. ...