Muhlbradt v. Pederson

Filed 8/27/20 by Clerk of Supreme Court
IN THE SUPREME COURT
STATE OF NORTH DAKOTA
2020 ND 187Danny B. Muhlbradt and Mary L. Muhlbradt,
Trustees of the Danny B. Muhlbradt and
Mary L. Muhlbradt Family Trust, UTD Dated
April 16, 2010, Francis D. Brunsell and
Joann F. Brunsell, as Trustees of the Brunsell
Revocable Trust dated September 23, 2015,
Linda Ruud, and Jean Hendrickson, Plaintiffs and Appellees
v.
Beverly Pederson, Barbara Sauvageau,
Colleen Folven, Gary Lind, Robin Lind,
Shayna Harder Wiggins, John T. Reeves, III,
as custodian for J.R. under North Dakota
Uniform Transfers to Minors Act, Kathy
Harder, Roxane Forsberg a/k/a Roxanne Forsberg,
Renae Tompkins, Kimberly J. Young, and
Denise R. Young, Defendants and Appellants
and
Ron Sjol, Jessica Rae Owen, individually and as co-
personal representative of the Estate of Jeffrey R.
Owen, deceased, Jenni Ray Hollister f/k/a Jenni
R. Owen, individually and as co-personal representative
of the Estate of Jeffrey R. Owen, deceased, and Scott
Bradley Owen, Defendants
No. 20190327
Appeal from the District Court of Mountrail County, North Central Judicial
District, the Honorable Richard L. Hagar, Judge.
AFFIRMED.
Opinion of the Court by McEvers, Justice.
Matthew H. Olson (argued) and Scott M. Knudsvig (on brief), Minot, ND, for
plaintiffs and appellees.
Sarah Aaberg (argued) and Stephen P. Welle (on brief), Fargo, ND, for
defendants and appellants.
Muhlbradt v. Pederson
No. 20190327
McEvers, Justice.
[¶1] The appellants (collectively, “Pederson defendants”) appeal after the
district court granted summary judgment quieting title to certain mineral
interests in the appellees (collectively, “Muhlbradt plaintiffs”). The Pederson
defendants argue that the court erred in deciding a deed did not except or
reserve a future 50 percent interest in the disputed mineral interests to the
defendants or their predecessor in interest. They further contend the court
erred in relying on division orders to conclude the defendants’ predecessor in
interest conveyed the disputed mineral interests. We affirm.
I
[¶2] The Muhlbradt plaintiffs and Pederson defendants are owners in the
chain of title of two tracts of land in Mountrail County. The dispute in this
case only involves “Tract 2” and the interpretation of a September 25, 1953
warranty deed between William J. Young, the grantor, and Harold and Irene
Olmstead, the grantees.
[¶3] On September 15, 1953, The Federal Land Bank of Saint Paul (“FLB”)
conveyed Tract 2 and additional lands to Young by limited warranty deed, in
which the FLB reserved 50 percent of the mineral interests in Tract 2 “for a
period of twenty-five (25) years from October 14th 1944,” unless any minerals
were being produced or removed from the premises or royalties were being
paid. The FLB subsequently filed a notice of disclaimer of its interest in the
minerals in and under Tract 2, dated October 24, 1969, after its expiration on
October 14, 1969.
[¶4] On September 25, 1953, Young conveyed Tract 2 to the Olmsteads by
warranty deed. As relevant to this case, the language in dispute in this deed
is the exception provided after the legal description of the property conveyed,
stating “except an undivided fifty percent of all oil, gas, and other minerals . . .
as reserved by The Federal Land Bank of Saint Paul in deed recorded in Book
288, Page 625[.]”
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[¶5] In July 2017, the Muhlbradt plaintiffs commenced this action seeking to
quiet title in the tracts. In October 2018, the Muhlbradt plaintiffs moved the
district court for summary judgment, asserting they are the owners of the 50
percent mineral interest in Tract 2 as the Olmsteads’ successors in interest.
The Pederson defendants opposed the motion and made a cross-motion for
summary judgment, asserting that Young had not conveyed the future interest
in the disputed 50 percent mineral interest and that they hold title to those
interests as his successors in interest.
[¶6] In January 2019, the district court held a hearing on the motions. In
August 2019, the court granted summary judgment to the Muhlbradt
plaintiffs, concluding the Olmsteads’ successors in interest are the rightful
owners. In construing the 1953 warranty deed, the court observed that Young
used the words and phrase “reserving” and “unto the party of the first part” to
establish his intent to reserve from the grant a 25 percent mineral interest to
himself and for his benefit. The court further observed, however, this language
was not used in either of the clauses involving the coal reserved by the United
States or the 50 percent mineral interest reserved by the FLB.
[¶7] The district court therefore concluded the warranty deed conveyed
Young’s future interest in the mineral interest to the Olmsteads and the
Olmsteads obtained full ownership of the mineral interest when the 25-year
FLB reservation expired under the language of the September 25, 1953
warranty deed. The court stated that “additional findings” were not required
based on its conclusion in construing the deed. Nevertheless, the court also
stated, regarding Tract 2, that a revised stipulation of interest in October 2009
had provided each party had ratified and affirmed earlier division orders
setting forth plaintiffs’ ownership interests.
II
[¶8] The district court decided this action by summary judgment, which “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.” THR Minerals, LLC v. Robinson, 2017 ND 78,
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¶ 6, 892 N.W.2d 193; see also Hamilton v. Woll, 2012 ND 238, ¶ 9, 823 N.W.2d
754. Questions of law are fully reviewable on appeal. THR Minerals, at ¶ 6.
This Court reviews a summary judgment decision de novo on the entire record.
Id. “Summary judgment is inappropriate if neither party is entitled to
judgment as a matter of law or if reasonable differences of opinion exist as to
the inferences to be drawn from the undisputed facts.” Markgraf v. Welker,
2015 ND 303, ¶ 10, 873 N.W.2d 26 (quoting N. Oil & Gas, Inc. v. Creighton,
2013 ND 73, ¶ 11, 830 N.W.2d 556).
III
[¶9] The Pederson defendants argue the district court erred when it
interpreted the 1953 deed as having conveyed William Young’s reserved future
mineral interest in Tract 2 to the Olmsteads.
[¶10] This Court interprets “deeds in the same manner as contracts, with the
primary purpose to ascertain and effectuate the parties’ or grantor’s intent.”
THR Minerals, 2017 ND 78, ¶ 8 (citing Sargent Cty. Water Res. Dist. v.
Mathews, 2015 ND 277, ¶ 6, 871 N.W.2d 608; Golden v. SM Energy Co., 2013
ND 17, ¶ 11, 826 N.W.2d 610); see also N.D.C.C. § 9-07-03. This Court
explained:
The parties’ intent is ascertained from the writing alone if possible.
N.D.C.C. § 9-07-04. “The language of a contract is to govern its
interpretation if the language is clear and explicit and does not
involve an absurdity.” N.D.C.C. § 9-07-02. “When the parties’
intent can be determined from the contract language alone,
interpretation of a contract presents a question of law.” Border
Res., LLC v. Irish Oil & Gas, Inc., 2015 ND 238, ¶ 15, 869 N.W.2d
758. . . . “[W]hen a contract is ambiguous, [however,] extrinsic
evidence may be considered to determine the parties’ intent, and
the contract terms and the parties’ intent become questions of
fact.” Border Res., at ¶ 15.
THR Minerals, at ¶ 8. “If rational arguments can be made in support of
contrary positions as to the term, phrase, or clause in question, a deed is
ambiguous and a district court may consider extrinsic evidence to determine
the parties’ intent.” Johnson v. Shield, 2015 ND 200, ¶ 7, 868 N.W.2d 368.
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“Whether a deed is ambiguous is a question of law, which is fully reviewable
on appeal.” Id.[¶11] The 1953 warranty deed at issue provides the following language after
the description of the property conveyed, in relevant part:
[Legal description of the property]; except coal in or under the
Southwest Quarter of said Section Fourteen and the East Half of
the Northeast Quarter of said Section Twenty-Two as reserved by
the United States; except an undivided fifty percent of all oil, gas,
and other minerals in or under the East Half of the Northeast
Quarter, the Southwest Quarter of the Northeast Quarter, and the
West Half of the Southeast Quarter of Section Twenty-Two, and
the Southwest Quarter of Section Fourteen as reserved by The
Federal Land Bank of Saint Paul in deed recorded in Book 288,
Page 625; and excepting and reserving unto the party of the first
part herein an undivided twenty-five percent of all oil, gas, and
other minerals in or under the East Half of the Northeast Quarter,
the Southwest Quarter of the Northeast Quarter, and the West
Half of the Southeast Quarter of said Section Twenty-Two[.]
(Emphasis added.)
[¶12] The Pederson defendants contend the district court erred in its
interpretation of the 1953 deed’s plain language to conclude Young conveyed
his reserved future mineral interest in Tract 2 to the Olmsteads. They contend
that under the deed’s language Young deducted his future interest, which was
reserved by the FLB, from the property granted by the clear exception
language in the granting clause of the 1953 deed.
[¶13] The Pederson defendants argue the district court erred in interpreting
the 1953 deed’s plain language to conclude Young did not except his future
reversionary interest in FLB’s reserved fifty percent interest. They argue the
court erred in holding the word “except” only served as a limitation on Young’s
warranty despite being in the granting clause. They contend the 50 percent
interest was “clearly” excepted from the conveyance to the Olmsteads based
on: 1) the plain language of the exception, 2) the location of the exception in
the granting clause, 3) the specific description of the property excepted, and 4)
4
Young’s intention to except the interest. They contend the court erred as a
matter of law in concluding otherwise.
[¶14] The Muhlbradt plaintiffs respond the district court properly concluded
the Olmsteads obtained full ownership of the mineral interest on October 14,
1969, when the FLB’s 25-year reservation expired, per the warranty deed’s
unambiguous language. The Muhlbradt plaintiffs argue the court’s decision
was based on the warranty deed’s unambiguous language alone.
[¶15] Our decision in Johnson v. Shield, 2015 ND 200, ¶ 8, 868 N.W.2d 368, is
instructive, recognizing “that reservations or exceptions of property interests
may appear in any part of a deed, including the warranty clause,” and stating
“[e]xceptions or exclusions of property should be set forth in the granting clause
with the same prominence as the property granted, or, if placed elsewhere,
should be so explicit as to leave no room for doubt.” Id. (quoting Royse v. Easter
Seal Soc’y for Crippled Children & Adults, Inc., 256 N.W.2d 542, 545 (N.D.
1977)). This Court further explained:
While it is often difficult to distinguish between exceptions
and reservations, both cause “something to be deducted from the
thing granted, narrowing and limiting what would otherwise pass
by the general words of the grant . . . and . . . the technical meaning
will give way to the obvious intent, even though the technical term
to the contrary was used.” (Citations omitted). Christman v.
Emineth, 212 N.W.2d 543, 552 (N.D. 1973). Thus, an obvious
intent to deduct something from the thing granted will be given
effect, whichever word is used.
Johnson, at ¶ 10 (quoting Mueller v. Stangeland, 340 N.W.2d 450, 452 (N.D.
1983)).
[¶16] We construe the 1953 warranty deed as clear on its face. While the
exception at issue falls within the granting clause of the 1953 warranty deed,
5
the dispositive language in the exception is “as reserved by.” We agree with
the district court’s conclusion that the deed’s language is unambiguous and
conveyed to the Olmsteads Young’s future interest in the 50 percent mineral
interests reserved by the FLB.
[¶17] The deed’s operative language, “except an undivided fifty percent of all
oil, gas, and other minerals . . . as reserved by The Federal Land Bank of Saint
Paul in deed recorded in Book 288, Page 625,” on its face excepts from the
conveyance the 50 percent interest “as reserved by” the FLB in the earlier deed.
The phrase “as reserved by” limits the exception’s scope and application to only
the FLB’s interest, “as reserved” in the prior limited warranty deed. We read
no “obvious intent” from the deed to deduct the future reversionary interest
from the property conveyance to the Olmsteads. Construing the 1953 warranty
deed as a whole, Young had specifically excepted and reserved to himself an
undivided 25 percent of the mineral interest, without reference to the potential
contingent future interest in the FLB limited warranty deed. Young could
have made clear an intent to except and reserve unto himself the future
interest in this clause, but did not.
[¶18] We conclude the deed is unambiguous and did not except and reserve the
future interest in the undivided 50 percent to Young. Our conclusion is based
on construing the deed’s exception as only excepting FLB’s interest “as
reserved by” the prior deed, held at the time of the 1953 deed, and construing
this language in the context of the other specific exception and reservation of
an undivided 25 percent reservation to Young. We therefore conclude the
district court did not err in construing the deed.
[¶19] We conclude the district court did not err in granting summary judgment
quieting title to certain mineral interests in the Muhlbradt plaintiffs.
6
IV
[¶20] We have considered the remaining arguments and conclude they are
either without merit or not necessary to our decision. The judgment is
affirmed.
[¶21] Lisa Fair McEvers
Daniel J. Crothers
Jerod E. Tufte
Gerald W. VandeWalle
Jon J. Jensen, C.J.
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