Dale Exploration, LLC, Bakken HBT, II LP, Dale Exploration, LP, and Dale Lease Acquisitions, LP, Plaintiffs
Orville G. Hiepler and Florence L. Hiepler, individually and also as co-trustees of the Orville G. Hiepler and Florence L. Hiepler Family Trust dated January 9, 1997, Defendants and Appellees Bill L. Seerup and Hurley Oil Properties, Inc., Defendants and Appellants and Hefner Company, Inc. Defendant
from the District Court of Williams County, Northwest
Judicial District, the Honorable Joshua B. Rustad, Judge.
M. Olschlager, Billings, MT, for defendants and appellants
Bill L. Seerup and Hurley Oil Properties, Inc.
Jonathan T. Garaas, Fargo, ND, for defendants and appellees
Orville G. Hiepler and Florence L. Hiepler.
VANDEWALLE, CHIEF JUSTICE.
1] Hurley Oil Properties, Inc. and Bill L. Seerup appealed
from a judgment awarding money damages instead of specific
performance for Orville Hiepler's breach of contract, the
Mineral Deed, conveying real property. Seerup and Hurley
contend the mineral deed signed by Orville Hiepler is
enforceable and requires Hiepler to convey the real property
currently held by the revocable trust of which he is a
settlor, trustee, and beneficiary. We conclude that the
mineral deed signed by Orville Hiepler, settlor of the
revocable trust, requires conveyance of the property and
accordingly, the district court erred in refusing to grant
specific performance. We reverse and remand.
2] In 1997 Orville and Florence Hiepler created the
"Orville G. Hiepler and Florence L. Hiepler Family Trust
Dated January 9, 1997" (the "Trust"). The
Hieplers conveyed most of their mineral interests to
themselves as co-trustees of the Trust in September 1997. The
conveyance was recorded in the office of the Williams County
Recorder in March 1998. Under the Trust, which was fully
revocable, the Hieplers were grantors, co-trustees, and
beneficiaries. Section 1.04(c) of the Trust document gives
the settlor the power to add and remove any property from the
Trust at any time, without requiring notice to or actions by
3] On April 7, 2007, Orville and Florence Hiepler deeded 150
net mineral acres in Williams County to Bill L. Seerup in
exchange for $15, 609.00. Included in the Mineral Deed were
further assurances and warranty clauses: "Grantor agrees
to execute such further assurances as may be requisite for
the full and complete enjoyment of the rights herein
granted..." and "Grantor does hereby warrant said
title to Grantee...." The Mineral Deed contained no
mention of the Trust or reference to Orville and Florence
Hiepler's role as co-trustees. When the Mineral Deed was
executed, the Hieplers, specifically Orville Hiepler,
individually owned only 7.3636 mineral acres. The remaining
142.6 mineral acres were owned by the Trust. Orville Hiepler
argues that he was unaware of what mineral acres he
individually owned when he signed the Mineral Deed.
4] Nine days after receiving the Mineral Deed from Orville
and Florence Hiepler, Seerup conveyed 135 mineral acres to
Hurley. At trial, Seerup testified that he did not do a title
examination on the mineral interests. It is unclear when
Seerup became aware that the minerals were titled under the
Trust. Seerup did not contact Orville and Florence Hiepler
about any issues with the mineral rights until 2011. Seerup
testified that he believed Orville Hiepler's signature
was sufficient to convey the mineral acres to him, even after
learning about the Trust.
5] In 2009 the Trust leased most of its mineral rights to
Kasmer & Aafedt Oil, Inc. The lease was originally
executed by Orville Hiepler in his individual capacity but
was ratified the following year by the Trust via the
signatures of Orville and Florence Hiepler as
"Co-Trustee of the Hiepler Family Trust Dated
1-9-1987" (sic). These were the same mineral rights
Orville and Florence Hiepler deeded to Seerup through the
2007 Mineral Deed.
6] Dale Exploration, LLC, filed suit in fall 2014 to quiet
title to 150 net mineral acres conveyed in the Mineral Deed
from Orville and Florence Hiepler to Seerup. Florence Hiepler
died in 2015. After Florence's death, Orville Hiepler
amended and restated the Trust recognizing Orville Hiepler as
the sole settlor and Orville and his son, Mark O. Hiepler, as
co-trustees. In September 2017, the district court dismissed
Dale Exploration's claims on summary judgment, finding no
evidence that Dale Exploration had an interest in the
disputed property. The court refused to grant summary
judgment on either the Hieplers' cross-claim to rescind
or reform the Mineral Deed or Seerup's cross-claim
requesting specific performance.
7] At a bench trial, the parties stipulated to the Mineral
Deed constituting a valid, enforceable, and unambiguous
contract that is fully binding between the parties. After
trial, the district court asked the parties for proposed
findings and conclusions of law. The district court adopted
the Hieplers' findings. The court found the Hieplers
owned the mineral interests in fee simple as trustees, not as
individuals. Additionally, the court found the Hieplers
breached the Mineral Deed, but that the breach was of the
covenant of seizin  and thus the proper remedy was damages
under N.D.C.C. § 32-03-11, not specific performance.
Damages in the amount of $20, 147.96 were awarded. The court
found specific performance was not appropriate since an
action at law for the breach of the covenant of seizin was
available. Further, the court found that Seerup and Hurley
had no claim for the breach of the covenant of further
assurances because under N.D.C.C. § 47-10-04 the expense
of complying with the further assurances falls onto the
8] We review a district court's findings of fact under
the clearly erroneous standard of N.D.R.Civ.P. 52(a) and its
conclusions of law de novo. Service Oil, Inc. v.
Gjestvang, 2015 ND 77, ¶ 12, 861 N.W.2d 490;
Hoff v. Krebs, 2009 ND 48, ¶ 9, 763 N.W.2d 520.
A finding of fact is clearly erroneous if it is induced by an
erroneous view of the law, if there is no evidence to support
it, or if, after reviewing all the evidence, we are left with
a definite and firm conviction a mistake has been made.
Service Oil, Inc., at ¶ 12. While this Court
does not "approve as a practice the [district]
court's wholesale adoption of one party's proposed
findings of fact," once the district court signs the
proposed findings, they "bec[o]me the court's
findings, and if they adequately explain the basis of the
court's decision, they will be upheld on appeal unless
clearly erroneous under N.D.R.Civ.P. 52(a)." S ...