McGhee v. Mergenthal

2007 ND 120, 735 N.W.2d 867, 2007 N.D. LEXIS 116, 2007 WL 2120627
CourtNorth Dakota Supreme Court
DecidedJuly 25, 2007
Docket20060268
StatusPublished
Cited by25 cases

This text of 2007 ND 120 (McGhee v. Mergenthal) 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
McGhee v. Mergenthal, 2007 ND 120, 735 N.W.2d 867, 2007 N.D. LEXIS 116, 2007 WL 2120627 (N.D. 2007).

Opinion

KAPSNER, Justice.

[¶ 1] Delia McGhee appealed from a judgment denying her request for a court order declaring that she holds a life estate interest in a Traill County farmstead. McGhee also appealed from an order denying her post-judgment motion for a new trial or, alternatively, for amendment of the findings and judgment. We affirm the judgment and the court’s order denying McGhee’s post-judgment motion.

I

[¶ 2] In 1972, McGhee’s parents deeded the family farm in Traill County to McGhee’s brother, Willard Jennings Mer-genthal (“Jennings”). As consideration for the deed, Jennings paid cash, assumed some of the parents’ debt obligations, and orally promised that he would maintain the property, pay the property taxes, and allow the parents and McGhee to live on the farmstead for as long as they lived. Jennings received a warranty deed, but it did not reserve a life estate or other interest to the parents or grant any interest to McGhee.

[¶ 3] Both parents died in the 1980s, but McGhee continuously lived on the farm until 1997 when flood damage necessitated that she move until repairs could be made to the home. McGhee applied to the Federal Emergency Management Agency (“FEMA”) for funds to defray the costs of repairing the damage. That agency required verification of McGhee’s status on the farmstead before issuing funds to her. To help McGhee meet that requirement, Jennings signed a notarized letter stating that McGhee “could live [on the farmstead] as long as [she] lived.” Funds were obtained, the property was repaired, and McGhee resumed living on the farmstead until November 2001, when she moved to an apartment, because the farmstead home became uninhabitable due to mold, bat infestation, and additional flood damage.

[¶ 4] In 2004, Jennings and his wife, Mary Mergenthal, deeded the property to their daughter, Rebekah Mergenthal. They issued to her a quitclaim deed, which specifically reserved a life estate for Jennings but did not mention any right by McGhee to reside on the property. Jennings died in October 2004. Rebekah Mergenthal’s attorney then sent notice to interested parties, including McGhee, to remove their personal property on the farmstead because the buildings were going to be demolished.

[¶ 5] After receiving notice, McGhee filed this action seeking a declaratory judgment that she has a life estate in the farmstead. After a bench trial, the court concluded McGhee did not have a life estate in the property. The court also concluded Jennings’ promise to allow McGhee to live on the farmstead was not a covenant running with the land which would obligate Rebekah Mergenthal to honor the promise. The court held that the 2004 deed conveyed to Rebekah Mergenthal a fee simple title, and judgment was entered *870 denying McGhee’s request for declaratory relief.

[¶ 6] McGhee filed a post-judgment motion seeking a new trial or, alternatively, amendment of the findings and judgment to state that she has a lifetime right to reside on the farmstead. In support of the motion, McGhee argued she was entitled to equitable relief under theories of implied trust and unjust enrichment. McGhee had not raised these arguments during the trial, but in deciding the post-judgment motion the court discussed the merits of McGhee’s equitable claims and issued an order denying McGhee’s motion.

II

[¶ 7] On appeal, McGhee raises the following single issue:

Whether the trial court erred because [McGhee] was the beneficiary of an implied trust allowing her to live on and enjoy the farmstead for as long as she lived?

[¶ 8] McGhee raised the theory of implied trust for the first time in her motion for a new trial under N.D.R.Civ.P. 59(b) or, alternatively, to amend the findings and judgment under N.D.R.Civ.P. 52(b).

[¶ 9] The trial court’s decision on a motion to alter or amend a judgment rests in its sound judgment and will not be reversed on appeal unless there is a manifest abuse of discretion. Woodworth v. Chillemi, 1999 ND 43, ¶ 7, 590 N.W.2d 446. This Court also reviews a trial court’s denial of a motion for a new trial under the abuse-of-discretion standard. State ex rel. Bd. of Univ. and School Lands v. Alexander, 2006 ND 144, ¶ 7, 718 N.W.2d 2, cert. denied, — U.S. —, 127 S.Ct. 1360, 167 L.Ed.2d 118 (2007). A court abuses its discretion if it acts in an arbitrary, unreasonable, or unconscionable manner, its decision is not the product of a rational mental process leading to a reasoned determination, or it misinterprets or misapplies the law. City of Bismarck v. Mariner Constr., Inc., 2006 ND 108, ¶ 8, 714 N.W.2d 484. Within the context of this limited review, we address McGhee’s argument that the trial court erred in failing to impose an implied trust allowing McGhee to live on the farmstead for her lifetime.

Ill

[¶ 10] An implied trust is one that is created by operation of law. N.D.C.C. § 59-01-05. There are two types of implied trusts: resulting trusts and constructive trusts. Spagnolia v. Monasky, 2003 ND 65, ¶ 15, 660 N.W.2d 223. An implied trust, whether resulting or constructive, must be established by clear and convincing evidence. Schroeder v. Buchholz, 2001 ND 36, ¶ 5, 622 N.W.2d 202

A

[¶ 11] In her brief supporting the post-judgment motion, McGhee argued the trial court should impose a resulting trust against Rebekah Mergenthal:

[T]he evidence would clearly indicate a resulting trust under the law. The acts and expressions of the parties have continually indicated an intent that such a relationship existed. Jennings Mergen-thal held title to the land but allowed his sister to remain there. The land bene-fitted from her improvements and her attention. At no time did Jennings Mer-genthal attempt to remove his sister from the property. Rebekah Mergen-thal voluntarily assumed the relation of personal confidence with Delia McGhee when she accepted delivery of the deed.

In denying the motion, the trial court reasoned:

[McGhee] makes several new arguments in support of [her] post-trial mo *871 tion. [McGhee] argues that Delia is a third party beneficiary of Jennings Mer-genthal’s promise to [Willard] and Lillian Mergenthal that Delia could live on the farmstead for the rest of her life. The Court agrees. However, this was Jennings Mergenthal’s promise, not Rebekah Mergenthal’s promise. Jennings Mergenthal’s promise did not run with the land, and therefore, Rebekah Mergenthal cannot be held responsible for any promise that Jennings Mergen-thal made.

[¶ 12] Whether or not a resulting trust has been created is primarily a question of intention. Zundel v. Zundel, 278 N.W.2d 123, 128 (N.D.1979); N.D.C.C. § 59-01-06(4). A resulting trust stems from acts or expressions of the parties indicating an intent that a trust relation result from their transaction. Paulson v. Meinke, 389 N.W.2d 798, 800 (N.D.1986). Imposition of a resulting trust gives a vague or incomplete agreement the substance that was originally intended by the parties.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

McKenzie Electric Coop., Inc. v. El-Dweek
2024 ND 227 (North Dakota Supreme Court, 2024)
State v. Wallace
2018 ND 225 (North Dakota Supreme Court, 2018)
Gray v. Berg
2016 ND 82 (North Dakota Supreme Court, 2016)
Stock v. Stock
2016 ND 1 (North Dakota Supreme Court, 2016)
Markgraf v. Welker
2015 ND 303 (North Dakota Supreme Court, 2015)
Estates of Vizenor and Vizenor v. Mesling
2014 ND 143 (North Dakota Supreme Court, 2014)
Datz v. Dosch
2014 ND 102 (North Dakota Supreme Court, 2014)
Thimjon Farms Partnership v. First International Bank & Trust
2013 ND 160 (North Dakota Supreme Court, 2013)
Hoverson v. Hoverson
2013 ND 48 (North Dakota Supreme Court, 2013)
State v. Bentz
2013 ND 43 (North Dakota Supreme Court, 2013)
Riemers v. Jaeger
2013 ND 30 (North Dakota Supreme Court, 2013)
Burgard v. Burgard
2013 ND 27 (North Dakota Supreme Court, 2013)
MayPort Farmers Co-Op v. St. Hilaire Seed Co.
2012 ND 257 (North Dakota Supreme Court, 2012)
Interest of Voisine
2012 ND 250 (North Dakota Supreme Court, 2012)
Holbach v. Holbach
2010 ND 116 (North Dakota Supreme Court, 2010)
White v. Altru Health System
2008 ND 48 (North Dakota Supreme Court, 2008)
Heyen v. State
2008 ND 45 (North Dakota Supreme Court, 2008)

Cite This Page — Counsel Stack

Bluebook (online)
2007 ND 120, 735 N.W.2d 867, 2007 N.D. LEXIS 116, 2007 WL 2120627, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mcghee-v-mergenthal-nd-2007.