Summary
The North Dakota Supreme Court reversed and remanded a judgment dismissing an action to reform warranty deeds and quiet title to Morton County property. The court held that the district court misstated the applicable legal inquiry by focusing on whether the contract for deed expressed the parties’ intent, rather than whether the warranty deeds did so, and remanded for application of the clear-and-convincing-evidence standard to the deeds. The court also held that an unpled acquiescence claim was not tried by implied consent.
Topics
Practice areas
Questions Presented
- Whether the district court applied the correct legal standard in determining whether the warranty deeds should be reformed.
- Whether the district court erred by failing to consider the plaintiffs' unpled alternative claim of acquiescence as having been tried by implied consent.
Holdings
- The district court applied the law incorrectly by directing the clear-and-convincing-evidence inquiry to whether the contract for deed stated the parties' intent, rather than whether the warranty deeds correctly stated that intent.
- Consent to try an issue outside the pleadings cannot be implied merely from evidence relevant to the pleaded claims that also bears on the unpled issue.
Key quotations
“The party seeking reformation of a written instrument must establish by clear and convincing evidence that the document does not state the parties’ intended agreement.” (¶ 7)
“Consent to try an issue outside the pleadings cannot be implied from evidence which is relevant to the pleadings but which also bears on an unpled issue.” (¶ 14)
“We reverse the judgment and remand the case to the district court for a determination of whether there is clear and convincing evidence that the warranty deeds do not correctly state the parties’ intent.” (¶ 15)
Factual background
In 1981, Arthur and Doris Wageman entered into a contract for deed with Eugene Weisbeck for approximately eleven acres of Morton County property, including what later became Lot A and Lot B. After the contract was paid, Doris Wageman conveyed only Lot A to Weisbeck, and Weisbeck and Richard Wageman later executed deeds conveying only Lot A to the Schindlers. The Schindlers and the Estate sought reformation of the deeds and quiet title to both lots, relying primarily on the discrepancy between the contract for deed and the warranty deeds and on testimony that Larry Schindler had walked both areas with Arthur Wageman.
Procedural history
The plaintiffs sought to reform warranty deeds so they would convey both Lot A and Lot B, consistent with a 1981 contract for deed, and to quiet title in themselves. After a trial, the Morton County District Court dismissed the action, finding the plaintiffs had not established that the contract for deed and warranty deed incorrectly stated the parties' intent. The North Dakota Supreme Court reversed and remanded for application of the correct legal standard and consideration of whether the warranty deeds reflected the parties' intent.
Remand instructions
The district court must determine whether clear and convincing evidence establishes that the warranty deeds do not correctly state the parties' intent. The court should apply the legal standard to the warranty deeds rather than to the contract for deed.