Daniel O. Motter and Marlene A. Motter, Plaintiffs and Appellees
Traill Rural Water District, Defendant and Appellant
from the District Court of Steele County, East Central
Judicial District, the Honorable Douglas R. Herman, Judge.
A. Turman, Fargo, ND, for plaintiffs and appellees.
Theodore T. Sandberg, Grand Forks, ND, for defendant and
1] Traill Rural Water District ("TRWD") appeals
from a judgment granting damages for overdue rent to Daniel
and Marlene Motter ("the Motters"). We conclude the
district court did not err in denying reformation of two
leases on the Motters' land and did not abuse its
discretion in granting a new trial. We affirm the district
2] In 2006 Melba Motter, through her estate's conservator
Alerus Financial, leased approximately forty acres of land in
rural Steele County to TRWD at $250 per acre for ninety-nine
years. Attorneys for both Melba Motter's estate and TRWD
negotiated the leases. In January 2011 Daniel Motter,
grandson of Melba Motter, and Daniel's wife Marlene
Motter acquired title to the land, including the leases.
Identical payment terms appeared on each of the two leases:
"Lessee shall pay Lessor during the term of this lease
as follows: $250.00 per acre per year upon development of the
water wells; $250.00 per parcel shall be paid as an option on
this lease until water wells are developed."
TRWD made the $1, 000 option payment to the Motters in
November 2006, and development of the water wells began in
August 2010. The four well sites occupy approximately two
acres of the forty acres described in the leases. The lease
payment structure in this matter differs from similar leases
signed by TRWD and neighboring water districts.
3] Daniel Motter received offers from TRWD to renegotiate the
leases during the period from 2006 to 2011, when he farmed
the land but did not own it. Daniel Motter reviewed the TRWD
leases in 2014 and claimed back rent of $10, 000 per year for
the full forty acres from 2011 through 2014. TRWD offered $4,
500 compared to Motter's initial calculation of $31, 300.
The district court acknowledged the mathematical error and
adjusted to $51, 500 for the five years from 2011 to 2015.
The parties' different interpretations led to this
4] At trial in December 2015 the district court ruled TRWD
met its burden of clear and convincing proof for mutual
mistake and contract reformation. The district court found
past rent due on all forty acres for 2011 through 2013, then
adjusted to a per-well basis for rent beginning in 2014. This
specific reformation argument first appeared in TRWD's
post-trial brief. The Motters timely moved for a new trial
under N.D.R.Civ.P. 59(b), claiming they were not prepared to
address a theory of reformation following the trial because
TRWD raised the specific issue of mistake for the first time
in its post-trial brief. TRWD claimed it preserved its
affirmative defenses and the Motters should have been on
notice that reformation was a possible argument in a contract
interpretation suit. The district court granted the
Motters' motion under N.D.R.Civ.P. 59(b)(3),
"surprise, " after dispensing with the Rule
59(b)(4) "new evidence" possibility and considering
alternative grounds of "abuse of discretion in the
introduction of a new theory."
5] At a second trial in 2016 the district court reversed its
previous findings based on additional evidence of lease
negotiations. The district court relied on N.D.C.C.
§§ 9-07-04 and 32-04-17 to determine the
contract's intent and wording meant the parties agreed to
a per-acre payment of $250. Judgment was entered for $51, 500
plus prejudgment interest.
6] TRWD argues the district court abused its discretion in
granting a new trial because the Motters did not seek a
continuance or request ...