Bakken v. Duchscher

2013 ND 33, 827 N.W.2d 17, 2013 WL 675649, 2013 N.D. LEXIS 24
CourtNorth Dakota Supreme Court
DecidedFebruary 26, 2013
DocketNo. 20120232
StatusPublished
Cited by23 cases

This text of 2013 ND 33 (Bakken v. Duchscher) is published on Counsel Stack Legal Research, covering North Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bakken v. Duchscher, 2013 ND 33, 827 N.W.2d 17, 2013 WL 675649, 2013 N.D. LEXIS 24 (N.D. 2013).

Opinion

MARING, Justice.

[¶ 1] Dennis Bakken and Evangeline Bakken appeal from a judgment declaring the Bakkens no longer have an option to' repurchase Pierce County property Paul and Evangeline Bakken sold to John and Bernadine Duchscher in 1991, and which the Duchschers later transferred to John Duchscher, Jr., and Ann Duchscher. We reverse and remand, concluding the district court erred as a matter of law in ruling that the Bakkens’ option to repurchase the property has expired.

I

2] Paul and Evangeline Bakken owned and operated a small farm located in parts of Benson and Pierce counties. Dennis Bakken is their only child. John and Bernadine Duchscher are the Bak-kens’ neighbors. John Duchscher, Jr., is the Duchschers’ son, and Ann Duchscher is his wife.

[¶ 3] In 1991, the Bakkens were faced with substantial medical bills incurred for Paul Bakken’s care. The Bakkens visited with attorney Charles Orvik about attempting to protect the farm from medical creditors and assisting them in obtaining a bank loan. Orvik called John and Bernadine Duchscher and inquired whether they would be interested in purchasing the Bak-kens’ land. After the Bakkens and Duchschers met in the law office, Orvik prepared an earnest money contract of sale for two parcels of the Bakkens’ farmland, one located in Benson County and referred to in this case as parcel A, and the other located in Pierce County and referred to as parcel B. The unsold farmland is referred to as parcel C. The earnest money contract listed the purchase price as $70,000, which was approximately $135 per acre, and provided:

[19]*19It is agreed between the parties that the Seller shall have the option to purchase the land hereby sold or any part thereof at the election of the Seller. Such price to be at One Hundred Thirty-five and no/100 dollars ($135.00) per acre. It is also agreed that John A. Duchscher and Bernadine R. Duchscher shall have the first right of refusal to purchase the unsold land at the same price.

[¶ 4] In late 1991, warranty deeds were executed and recorded for parcels A and B. Each deed provided:

This Deed is given subject to an option to re-purchase the land hereby sold or any part thereof at the election of the Grantor(s). Such price to be at One Hundred Thirty-five and no/100 Dollars ($135.00) per acre.

Neither the earnest money contract nor the warranty deeds listed a termination date for exercising the options to repurchase.

[¶ 5] In 1992, the Bakkens and the Duchschers entered into another agreement which related only to parcel B located in Pierce County. The “Agreement” was also recorded, and provided:

It is mutually agreed, the mutual promises, covenants, conditions and obligations herein contained being consideration therefore, that the Optioner will not sell the land within a period of ten (10) years without such sale containing a provision that the Optionee has the continued right to purchase and Optionees agree that Optioner will not for a period of ten (10) years exercise the option to purchase.

Paul Bakken died in 1994.

[¶ 6] In 2008, the Duchschers transferred parcel B, the Pierce County property, to John Duchscher, Jr., and Ann Duchscher. Six weeks after the transfer, the Bakkens by letter notified the Duchschers they were “in a position to exercise the option” to repurchase parcel B. A year later, the Bakkens brought this lawsuit against the Duchschers seeking a declaration that they have the right to repurchase the property.

[¶ 7] After denying the parties’ motions for summary judgment, the district court held a bench trial. The major focus of the trial was on the parties’ understandings of the 1992 agreement. The Duchschers both testified the 1992 agreement ended the Bakkens’ right to repurchase after a period of ten years. Evangeline Bakken testified the agreement meant the Bak-kens could repurchase the property after the ten-year period had passed. The parties agreed the 1992 agreement contained scrivener’s errors and the court corrected the disputed paragraph of the agreement to provide “that the [Duchschers] will not sell the land within a period of ten (10) years without such sale containing a provision that the [Bakkens] ha[ve] the continued right to purchase and [Duchschers] agree that [Bakkens] will not for a period of ten (10) years exercise the option to purchase.” The Duchschers contended the latter clause should have read “[Bakkens] agree that [Bakkens] will not for a period of ten (10) years exercise the option to purchase,” but agreed that under either the court’s construction or their construction the Bakkens could not repurchase parcel B for a period of ten years.

[¶ 8] The district court interpreted the corrected 1992 agreement and ruled in favor of the Duchschers:

The first clause of the paragraph states that Defendants will not sell Parcel B within a ten-year period without a clause containing Plaintiffs’[ ] option clause.... The second part of the paragraph provides, in the corrected form, that Plaintiffs will not exercise their op[20]*20tion to purchase Parcel B for a period of ten years....
Plaintiffs assert that this Agreement only prevented them from repurchasing Parcel B for the ten years after the date of the Agreement; it did not provide that they had to repurchase in the subsequent ten years. Plaintiffs further argue that the Agreement did not indicate that they gave up their right to repurchase after ten years, as the Agreement did not mention any restriction on that right other than a restriction on exercising the option to repurchase for ten years.
Defendants argue that the option expired after ten years. Defendants point to the language in the Agreement referring to their ability to sell the land during the ten years following the date of the Agreement containing a provision that they must include notice of Plaintiffs’!] option to repurchase. Defendants assert that since this language only needed to be provided in any sale in the ten years following the Agreement, after ten years, they were free to sell Parcel B without mention of any option for Plaintiffs! ] to repurchase the property. This, they argue, supports their position that the option expired after ten years. Further, they argue, if the option does still exist, it is barred by the doctrine of laches.
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The plain language of the Agreement provides that Defendants were to provide notice about Plaintiffs’!] option to repurchase Parcel B to any sellers [sic] in the ten years following the date of the Agreement.... After that time, the plain language of the Agreement did not require any notice to be given_De-fendants were free to sell Parcel B after ten years without providing notice of the option.... The Agreement provided no restrictions on Defendants’!] ability to sell Parcel B after the ten-year period.... While the Agreement contains a repugnancy, namely the two ten-year restrictions — on the ability to sell with giving notice of the option, and on the ability to exercise the option — they must be reconciled by an interpretation that will give some effect to this clause subordinate to the general intent and purpose of the whole contract. See N.D.C.C. § 9-07-17. The intent of the parties, as appearing in the plain language of the Agreement, was to add restrictions to the original Earnest Money Contract of Sale regarding the Pierce County property....

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Bluebook (online)
2013 ND 33, 827 N.W.2d 17, 2013 WL 675649, 2013 N.D. LEXIS 24, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bakken-v-duchscher-nd-2013.