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Heitkamp v. Kabella

Supreme Court of North Dakota

April 11, 2019

Debra Heitkamp, as Personal Representative for the Estate of Nick Lyons, Plaintiff and Appellant
v.
Kevin Kabella, Defendant and Appellee

          Appeal from the District Court of Richland County, Southeast Judicial District, the Honorable Bradley A. Cruff, Judge.

          Opinion of the Court by Jensen, Justice. Asa K. Burck (argued) and Kip M. Kaler (on brief), Fargo, ND, for plaintiff and appellant.

          Mark A. Meyer, Wahpeton, ND, for defendant and appellee.

          Jensen, Justice.

         [¶1] Debra Heitkamp, the personal representative of the Estate of Nick Lyons, appeals from a district court judgment in favor of Kevin Kabella following cross-motions for summary judgment alleging the district court improperly determined the parties' agreement was invalid because it fell within the limitation on the length of agricultural leases provided by N.D.C.C. § 47-16-02. We reverse the judgment and remand for further proceedings.

         I.

         [¶2] Kevin Kabella and Nick Lyons entered into an agreement pertaining to farmland on March 29, 2007. Under the terms of the agreement, Lyons was to pay Kabella the total sum of $20, 670. Forty percent of the total sum was paid upon the signing of the agreement with payment equaling twenty percent of the total being made in each of the three subsequent years. The agreement gave Lyons possession and use of the property "in perpetuity." In addition to receiving the property in perpetuity, the agreement stated Kabella may sell the property subject to Lyons' right to purchase the property for $72, 345.

         [¶3] Prior to the 2012 farming season, Kabella attempted to lease the property to Kermit Anderson Jr. Lyons refused to vacate the property asserting he was entitled to the use and possession of the property pursuant to his agreement with Kabella. Anderson brought an eviction action to remove Lyons from the property. Kabella was included as a defendant to allow a resolution of any issues regarding the agreement between Kabella and Lyons.

         [¶4] In the litigation initiated by Anderson, Anderson and Kabella asserted the March 29, 2007 agreement between Kabella and Lyons was invalid under N.D.C.C. § 47-16-02, which precludes agricultural leases in excess of ten years. Lyons asserted the agreement did not fall within the limitation of N.D.C.C. § 47-16-02. The district court entered a judgment in favor of Lyons finding the March 29, 2007 agreement was valid until at least March 29, 2017. The decision was appealed to this Court which affirmed the district court's decision in Anderson v. Lyons, 2014 ND 61, 845 N.W.2d 1 (Lyons I).

         [¶5] In Lyons I, Kabella and Anderson argued the agreement was a lease that fell within the limitations of N.D.C.C. § 47-16-02. Lyons argued the agreement was not within the limitation, and this Court declined to decide whether the agreement at issue here was limited by N.D.C.C. § 47-16-02 because express provisions of the agreement could terminate the agreement before ten years had passed. Lyons I, 2014 ND 61, ¶ 17, 845 N.W.2d 1. In doing so, this Court cited two contingencies which could end the agreement prior to ten years: (1) Kabella could sell the land or (2) Lyons may opt out of the agreement. Id. We concluded "the district court did not err in determining the 2007 agreement did not violate N.D.C.C. § 47-16-02 and was not invalid." Id. We specifically noted we had not determined whether the agreement would be "invalid should it extend beyond ten years." Id.

         [¶6] Lyons passed away in May 2013, and Debra Heitkamp was appointed personal representative of the estate. The estate has utilized the property since that time. In March 2017, Heitkamp, as personal representative of the estate of Lyons, brought the present action seeking a declaratory judgment that the agreement is valid in perpetuity. The district court granted summary judgment to Kabella and found the agreement was a lease that fell within the restrictions of N.D.C.C. § 47-16-02, and due to the non-occurrence of any of the contingencies contained in the agreement, it expired on its tenth anniversary, March 29, 2017. The court awarded Kabella damages equal to the fair value of the use of the property subsequent to March 29, 2017. The estate argues, in part, that the payments provided under the lease were not "rent or services," and therefore the agreement did not fall within the limitation on agricultural leases provided by N.D.C.C. § 47-16-02. We did not address this issue in Lyons I. The issue is also consistent with the argument made by Lyons in the 2012 eviction action, on appeal in Lyons I, and again to the district court in this case asserting the agreement does not fall within N.D.C.C. § 47-16-02.

         II.

         [¶7] This Court's standard for reviewing a district court's decision granting summary judgment under N.D.R.Civ.P. 56 is well established:

Summary judgment is a procedural device for the prompt resolution of a controversy on the merits without a trial if there are no genuine issues of material fact or inferences that can reasonably be drawn from undisputed facts, or if the only issues to be resolved are questions of law. A party moving for summary judgment has the burden of showing there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law . . . . Whether ...

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