Fettig v. Fettig , 2019 ND 261 ( 2019 )

F I L E D 10/29/19 B Y C L E R K O F S U P R E M E C O U R T
IN THE SUPREME COURT
STATE OF NORTH DAKOTA
2019 ND 261
Howard F. Fettig, Plaintiff and Appellee
v.
Estate of Anton L. Fettig, Gerald A. Cullen
as Conservator for S.F.F., Charles E. Fettig,
Morgen J. Fettig, Gabriel W. Fettig, and all
other persons known and unknown having or claiming
any right, title, estate or interest in or lien
or encumbrance upon the real property described
in the complaint, whether as heirs, devisees,
legatees or Personal Representatives of the
aforementioned parties or as holding any claim
adverse or Plaintiffs' ownership or any cloud
upon Plaintiffs' title thereto, Defendants
and
Anton Jacob Fettig, Defendant and Appellant
No. 20190102
Morgen J. Fettig, Plaintiff and Appellee
v.
Estate of Anton L. Fettig, Gerald A. Cullen
as Conservator for S.F.F., Charles E. Fettig,
Howard F. Fettig, Gabriel W. Fettig, and all
other persons known and unknown having or claiming
any right, title, estate or interest in or lien
or encumbrance upon the real property described
in the complaint, whether as heirs, devisees,
legatees or Personal Representatives of the
aforementioned parties or as holding any claim
adverse or Plaintiffs' ownership or any cloud
upon Plaintiffs' title thereto, Defendants
and
Anton J. Fettig, Defendant and Appellant
No. 20190103
Appeal from the District Court of McKenzie County, Northwest Judicial
District, the Honorable Robin A. Schmidt, Judge.
AFFIRMED.
Opinion of the Court by VandeWalle, Chief Justice.
Christina M. Wenko, Dickinson, ND for plaintiffs and appellees.
Nathan M. Bouray, Dickinson, ND for defendant and appellant.
Fettig v. Fettig, et al.
Nos. 20190102 & 20190103
VandeWalle, Chief Justice.
[¶1] Anton Jacob Fettig appealed from two district court judgments
quieting title to real property in McKenzie County. We conclude the district
court erred in determining that the deed conveying the property was void,
but that the issue is barred by collateral estoppel. We affirm.
I
[¶2] Anton L. Fettig (Anton) owned three parcels of real property located
in McKenzie County [hereinafter referred to as section 5, section 17, and
section 22].1 On December 19, 2001, Anton executed a warranty deed
conveying sections 5, 17, and 22 to his two minor children, A.J.F. and S.F.F.
Anton recorded the deed the same day. At the time of the conveyance, A.J.F.
and S.F.F. were approximately three and five years of age.
[¶3] On March 15, 2004, Anton received an email from Margit Williams,
an attorney with the United States Department of Agriculture, stating that
the Department considered the 2001 deed void, and that Anton still owned
the land. As a result of this email, and in an attempt to clear title to the
land, Anton executed a warranty deed on April 14, 2004, conveying the land
back to himself. The deed named Anton as both the grantor and grantee.
The deed was recorded the same day.
1 The legal descriptions of these sections of property are as follows:
Township 149 North, Range 94 West, 5th PM
Section 5: Lots 3 and 4, S1/2 NW 1/4, SW1/4
Township 149 North, Range 94 West of the 5th PM
Section 17: S1/2
Township 149 North, Range 94 West of the 5th PM
Section 22: W1/2
1
[¶4] On June 21, 2005, Anton executed a quitclaim deed conveying section
17 to his son Howard Fettig. The deed was recorded on May 11, 2006.
[¶5] On July 10, 2005, Anton executed a quitclaim deed conveying section
22 to his son Morgen Fettig. Also on July 10, 2005, Anton deeded section 5
to his son Charles Fettig. These deeds were both recorded on May 1, 2006.
[¶6] In January 2016, Charles Fettig filed suit seeking to quiet title to
section 5. The complaint named Anton, Anton as conservator for A.J.F. and
S.F.F.,2 and Howard, Morgen, and Gabriel Fettig as defendants. Anton died
on January 23, 2016. Charles and Anton as conservator for A.J.F. and S.F.F.
each filed motions for summary judgment. In November 2016, the district
court ordered summary judgment in favor of Charles. The court concluded
that the 2001 deed conveying the land to A.J.F. and S.F.F. was void under
N.D.C.C. §§ 9-02-02 and 14-10-10, and that Charles was the true and correct
owner of section 5. None of the parties to this action appealed the court’s
judgment.
[¶7] Because the district court ruled for Charles, Howard and Morgen filed
separate suits seeking to quiet title to the sections previously conveyed to
them (sections 17 and 22). These lawsuits named the estate of Anton L.
Fettig, A.J.F., Gerald A. Cullen as conservator for S.F.F., Charles Fettig,
Gabriel Fettig, and each other as defendants. A.J.F. answered and
counterclaimed seeking quiet title to sections 17 and 22. Howard, Morgen,
and A.J.F. each filed motions for summary judgment. On January 31, 2019,
the district court ordered summary judgment in favor of Howard and
Morgen. The district court concluded that the 2001 deed conveying the land
to A.J.F. and S.F.F. was void under N.D.C.C. §§ 9-02-02 and 14-10-10, that
Howard was the true and correct owner of section 17, and that Morgen was
the true and correct owner of section 22. A.J.F. timely appealed the district
court’s orders.
2A conservatorship was created in 2009 on behalf of A.J.F. and S.F.F. Anton was appointed as
the conservator for both children.
2
II
[¶8] Our standard for reviewing summary judgments 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. In determining whether summary
judgment was appropriately granted, we must view the
evidence in the light most favorable to the party opposing the
motion, and that party will be given the benefit of all favorable
inferences which can reasonably be drawn from the record. On
appeal, this Court decides whether the information available to
the district court precluded the existence of a genuine issue of
material fact and entitled the moving party to judgment as a
matter of law. Whether the district court properly granted
summary judgment is a question of law which we review de
novo on the entire record.
Gerrity Bakken, LLC v. Oasis Petroleum N. Am., LLC, 2018 ND 180, ¶ 8,
915 N.W.2d 677 (quoting Arnegard v. Arnegard Twp., 2018 ND 80, ¶ 18, 908
N.W.2d 737).
III
[¶9] Howard and Morgen contend that the 2001 deed conveying the land
is void because A.J.F. and S.F.F. were minors at the time of conveyance and,
therefore, could not enter into contracts relating to real property. A.J.F.
argues that the conveyance was meant as a gift, and that contractual
capacity was not needed for conveyance. In all three cases relating to the
validity of the 2001 deed, the district court determined that the deed was
void under N.D.C.C. §§ 9-02-02 and 14-10-10 because A.J.F. and S.F.F. were
minors when the land was conveyed and lacked capacity to enter into
contracts relating to real property. We cannot agree with Howard and
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Morgen’s argument or the district court’s determination that the 2001 deed
is void under N.D.C.C. §§ 9-02-02 and 14-10-10.
[¶10] Title to property of any kind may be transferred from one living
person to another. See N.D.C.C. §§ 47-09-01, -02. Voluntary transfers are
executed contracts, subject to all rules of law concerning contracts, except
that consideration is not necessary for the transfer to be valid. N.D.C.C. §
47-09-03. “An estate in real property . . . can be transferred . . . by an
instrument in writing, subscribed by the party disposing of the same . . . .”
N.D.C.C. § 47-10-01. A deed is a writing sufficient to transfer an estate in
real property. See Mehus v. Thompson, 266 N.W.2d 920, 925 (N.D. 1978).
We have stated that deeds are contracts and are generally construed in the
same manner as contracts. Motter v. Traill Rural Water Dist., 2017 ND 267,
¶ 10, 903 N.W.2d 725; Riverwood Commercial Park, LLC v. Standard Oil
Co., 2011 ND 95, ¶ 7, 797 N.W.2d 770; Radspinner v. Charlesworth, 369
N.W.2d 109, 112 (N.D. 1985).
[¶11] Generally, “[a] contract requires parties capable of contracting,
consent of the parties, a lawful object, and sufficient consideration.” Stout
v. Fisher Indus., Inc., 1999 ND 218, ¶ 11, 603 N.W.2d 52; N.D.C.C. § 9-01-
02. “[P]arties capable of contracting” refers to the contractual capacity of
the parties. See Galloway v. Galloway, 281 N.W.2d 804, 805-06 (N.D. 1979).
Whether a minor is capable of contracting (i.e., possesses contractual
capacity) is provided for in N.D.C.C. ch. 9-02. Section 9-02-02, N.D.C.C.,
states: “Minors and persons of unsound mind have only such capacity as is
specified in statutes relating to such persons.” Under N.D.C.C. § 14-10-10,
“a minor may make any contract other than contracts specified in section
14-10-09 in the same manner as an adult, subject only to the minor’s power
of disaffirmance.” Section 14-10-09, N.D.C.C., provides: “A person under the
age of eighteen may not make a contract relating to real property or any
interest therein . . . .”
[¶12] However, when a voluntary transfer is intended as a gift, the rules of
law concerning gifts, not contracts, applies. See Bleick v. N.D. Dep’t of
Human Servs., 2015 ND 63, ¶ 19, 861 N.W.2d 138; Doeden v. Stubstad, 2008
4
ND 165, ¶ 12, 755 N.W.2d 859. A valid gift requires donative intent, actual
or constructive delivery, and acceptance by the donee. Kovarik v. Kovarik,
2009 ND 82, ¶ 13, 765 N.W.2d 511; In re Paulson’s Estate, 219 N.W.2d 132,
134 (N.D. 1974); In re Kaspari’s Estate, 71 N.W.2d 558, 567 (N.D. 1955);
Ramsdell v. Warner, 48 N.D. 96, 183 N.W. 281, 283 (1921). These
requirements apply to gifts of both real and personal property. See Lindvig
v. Lindvig, 385 N.W.2d 466, 469 (N.D. 1986) (citing Hagerott v. Davis, 73
N.D. 532, 551, 17 N.W.2d 15, 25 (1944)); Paulson’s Estate, at 135.
[¶13] Consistent with our previous holdings and general principles of law,
we hold here that a donative transfer of real property, intended as a gift,
between a parent and child need not comport with all rules of law
concerning contracts. See 67A C.J.S. Parent and Child §§ 306-318 (2019);
Restatement (Third) of Property §§ 6.1, 6.3, 8.2 cmt. e (2003). Rather, such
a transfer must be consistent with the rules of law concerning gifts and
transfers of real property as provided in N.D.C.C. § 47-10-01. Therefore, a
gift of real property to a minor does not fall within the purview of N.D.C.C.
§§ 14-10-09, -10.
[¶14] Because real property may be gifted to a minor, the district court
erred in concluding that the 2001 deed was void.
IV
[¶15] However, Howard and Morgen also argue that A.J.F.’s counterclaim
seeking to quiet title is barred by the doctrine of res judicata because of the
2016 action initiated by Charles involving section 5, in which the validity of
the 2001 deed was disputed and determined by the district court to be void.
Res judicata “is a term often used to describe such doctrines as
merger, bar, and collateral estoppel, or the more modern terms
of claim preclusion and issue preclusion.” These doctrines
promote efficiency for both the judiciary and litigants by
requiring that disputes be finally resolved and ended. But the
doctrines are not “to be applied so rigidly as to defeat the ends
of justice . . . .”
5
Hofsommer v. Hofsommer Excavating, Inc., 488 N.W.2d 380, 383 (N.D.
1992) (citations omitted). “The applicability of res judicata or collateral
estoppel is a question of law, fully reviewable on appeal.” Ungar v. N.D.
State Univ., 2006 ND 185, ¶ 10, 721 N.W.2d 16 (citing Hofsommer, at 383).
[¶16] We have explained the application of res judicata and collateral
estoppel, noting the distinctions between the similar doctrines:
“Although collateral estoppel is a branch of the broader law of
res judicata, the doctrines are not the same.” Res judicata, or
claim preclusion, prevents relitigation of claims that were
raised, or could have been raised, in prior actions between the
same parties or their privies. Thus, res judicata means a valid,
existing final judgment from a court of competent jurisdiction
is conclusive with regard to claims raised, or those that could
have been raised and determined, as to [the] parties and their
privies in all other actions. Res judicata applies even if
subsequent claims are based upon a different legal
theory. Collateral estoppel, or issue preclusion, forecloses
relitigation of issues of either fact or law in a second action
based on a different claim, which were necessarily litigated, or
by logical and necessary implication must have been litigated,
and decided in the prior action.
Riverwood Commercial Park, L.L.C. v. Standard Oil Co., 2007 ND 36, ¶ 13,
729 N.W.2d 101 (quoting Ungar, 2006 ND 185, ¶¶ 10-11, 721 N.W.2d 16).
The primary differences between res judicata claim preclusion and
collateral estoppel issue preclusion can be summarized as follows:
The basic difference between claim preclusion and issue
preclusion is simply put: claim preclusion applies to whole
claims, whether litigated or not, whereas issue preclusion
applies to particular issues that have been contested and
resolved. Claim preclusion is broader in scope than issue
preclusion as to the claims that come within its purview, but
narrower in scope as to the parties to whom the doctrine can be
applied. While claim preclusion and issue preclusion advance
the same basic principle—the need for finality in judicial
proceedings—they do so in substantially different ways. Claim
6
preclusion prevents parties and those in privity with them from
raising legal theories, claims for relief, or defenses which could
have been raised in the prior litigation, even though such claims
were never actually litigated in the prior case. Issue preclusion,
on the other hand, precludes litigation of issues actually
litigated and necessary to the outcome of the prior case, even if
such issues are subsequently presented as part of a different
“claim.”
Id. at ¶ 14 (quoting 18 James W. Moore, Federal Practice § 131.13[1] (3d ed.
2006)).
[¶17] We discuss the application of both res judicata claim preclusion and
collateral estoppel issue preclusion below and conclude that A.J.F.’s claim
is barred by the doctrine of collateral estoppel issue preclusion.
A
[¶18] Under res judicata claim preclusion, “it is inappropriate to reargue
issues that were tried or could have been tried in earlier actions.” Martin v.
Marquee Pac., LLC, 2018 ND 28, ¶ 18, 906 N.W.2d 65 (citing Kulczyk v.
Tioga Ready Mix Co., 2017 ND 218, ¶ 10, 902 N.W.2d 485).
[A] judgment on the merits in the first action between the same
parties constitutes a bar to the subsequent action based upon
the same claim or claims or cause of action, not only as to
matters in issue but as to all matters essentially connected with
the subject of the action which might have been litigated in the
first action.
Perdue v. Knudson, 179 N.W.2d 416, 422 (N.D. 1970). Generally, a judgment
adjudicating rights or title to property only bars claims relating to the
particular property in controversy and does not extend to rights, title, or
interests in other property. 50 C.J.S. Judgments §§ 1089, 1189 (2019); see
Fawcett v. Rhyne, 63 S.W.2d 349, 354 (Ark. 1933); Martin v. Bobo, 292
S.W.3d 865, 870 (Ark. Ct. App. 2009); Farrell v. Brown, 729 P.2d 1090, 1094
(Idaho Ct. App. 1986); Ollison v. Vill. of Climax Springs, 916 S.W.2d 198,
201 (Mo. 1996); Sleeper v. Hoban Family P’ship, 955 A.2d 879, 883-85 (N.H.
2008); Girard Tr. Co. v. McGeorge, 15 A.2d 206, 206, 212 (N.J. Ch. 1940);
7
Penrose v. Absecon Land Co., 120 A. 207, 208 (N.J. 1923); City of Green v.
Clair, 2015-Ohio-662, at ¶¶ 20-21; Bonnieville Towers Condo. Owners Ass’n,
Inc. v. Andrews, 2008-Ohio-1833, at ¶ 19; Lawrence v. Ayres, 242 P.2d 142,
146 (Okla. 1952) (overruled on other grounds by Gardner v. Jones, 309 P.2d
731 (Okla 1956)); Karlberg v. Otten, 280 P.3d 1123, 1131 (Wash. Ct. App.
2012); see also State by Price v. Magoon, 858 P.2d 712, 725 (Haw. 1993);
Hangman v. Bruening, 530 N.W.2d 247, 249 (Neb. 1995); Valdez v. Smith,
32 P.2d 1022, 1022-23 (N.M. 1934); 50 C.J.S. Judgments § 985 (2019).
Therefore, quiet title actions for different parcels of property are separate
and distinct claims under res judicata claim preclusion.
[¶19] The 2001 deed involved three different parcels of property: section 5,
section 17, and section 22. Charles Fettig sought quiet title to section 5 in
2016, and A.J.F. counterclaimed seeking quiet title to the same parcel. In
2018, Howard and Morgen Fettig filed suit seeking quiet title to sections 17
and 22, respectively. A.J.F. counterclaimed seeking quiet title to these
parcels. Charles’, Howard’s, Morgen’s, and A.J.F.’s actions are each a
separate “claim” under res judicata claim preclusion because each involves
a different parcel of property. A.J.F.’s counterclaim is not barred by res
judicata claim preclusion because it is a separate claim under the meaning
of the doctrine.
[¶20] We need not address whether res judicata applies if a defendant in
the first action is designated as a plaintiff in the second action or vice versa.
We also need not address whether Howard and Morgen were in privity with
Charles. Because this action involves a separate claim than the first,
neither of these questions are necessary to our decision.
B
[¶21] “Historically, collateral estoppel was limited by the principle of
mutuality, which means that ‘a judgment can operate as collateral estoppel
only where all the parties to the proceeding in which the judgment is relied
upon were bound by the judgment.’” Hofsommer, 488 N.W.2d at 384
(quoting E.H. Schopler, Annotation, Comment Note.—Mutuality of Estoppel
as Prerequisite of Availability of Doctrine of Collateral Estoppel to a
8
Stranger to the Judgment, 31 A.L.R. 3d 1044, § 1(b) at 1048 (1970)).
“Although the principal of mutuality has been abandoned in numerous
jurisdictions, this court has applied the mutuality rule as a prerequisite to
the application of collateral estoppel.” Id. (internal citation omitted) (citing
Armstrong v. Miller, 200 N.W.2d 282, 286-88 (N.D. 1972)). “For all practical
purposes, the mutuality rule is coextensive with the requirement that the
plea of res judicata is available only to a party to the judgment and his
privies.” Id. (citing Armstrong, at 287).
Four tests must be met before collateral estoppel will bar
relitigation of a fact or issue involved in an earlier lawsuit: (1)
Was the issue decided in the prior adjudication identical to the
one presented in the action in question?; (2) Was there a final
judgment on the merits?; (3) Was the party against whom the
plea is asserted a party or in privity with a party to the prior
adjudication?; and (4) Was the party against whom the plea is
asserted given a fair opportunity to be heard on the issue?
Silbernagel v. Silbernagel, 2011 ND 140, ¶ 18, 800 N.W.2d 320 (quoting
Hofsommer, at 384).
[¶22] The issue decided by the district court in both the 2016 case initiated
by Charles and the present cases initiated by Howard and Morgen was the
validity of the 2001 deed. In both the first and second actions, the plaintiff
argued that the 2001 deed was void, and A.J.F. argued that the deed
conveyed a valid gift of real property. Identical arguments were made by all
parties involved in each of the three cases at issue. Additionally, the district
courts’ judgments concluded the 2001 deed was void based on the same legal
principals. The issue decided in the prior adjudication is identical to the one
presented in the action in question—the validity of the 2001 deed.
[¶23] The second test for collateral estoppel issue preclusion is also
satisfied. The district courts’ judgments in each case stemmed from cross-
motions for summary judgment. It is indisputable that the judgment
entered by the court in each case determined the validity of the 2001 deed
and was decided on the merits.
9
[¶24] A.J.F., the party against whom the plea is asserted, was a party to
the prior adjudication and was provided a fair opportunity to be heard on
the issue. A.J.F. was represented by counsel in the first dispute with
Charles involving section 5. A.J.F. fully litigated the dispute by
counterclaiming and arguing for the validity of the 2001 deed. The judgment
finding the 2001 deed void certainly put A.J.F. and his attorney on notice
that there could be similar implications for the other two sections of land
that were conveyed through the deed. We have previously held that
collateral estoppel issue preclusion acts to bar attacks on unappealed
judgments. See Ungar, 2006 ND 185, ¶¶ 5-7, 16-19, 721 N.W.2d 16. A.J.F.
is seeking to attack the unappealed judgment issued in the previous case
involving section 5 by relitigating the same issues in the present case
involving sections 17 and 22. Under the doctrine of collateral estoppel issue
preclusion, A.J.F. is barred from doing so. The validity of the 2001 deed was
actually litigated and necessary to the outcome of the prior case.
[¶25] For these reasons we hold that all four tests of collateral estoppel
issue preclusion are satisfied. The doctrine of collateral estoppel issue
preclusion bars A.J.F.’s counterclaim seeking quiet title to sections 17 and
22 because the validity of the 2001 deed was litigated in the 2016 case
involving section 5.
V
[¶26] The district court’s judgments are affirmed.
[¶27] Gerald W. VandeWalle, C.J.
Jon J. Jensen
Lisa Fair McEvers
Jerod E. Tufte
I concur in the result.
Daniel J. Crothers
10