Filed 2/28/19 by Clerk of Supreme Court

IN THE SUPREME COURT

STATE OF NORTH DAKOTA

2019 ND 58

In the Trust of Roger S. Linn Restated Trust Agreement, deceased

Scott Ottum, attorney in fact for

Shirley A. Linn, Petitioner, Appellant, and Cross-Appellee

v.

Wells Fargo Bank, N.A. and Harris W. Widmer

as co-Trustees of the Roger Linn Trust, Respondents and Appellees

 and

Stephen T. Linn, Deborah R. Wagner,

and Mark Wagner, Respondents, Appellees, and

 Cross-Appellants

No. 20180206

Appeal from the District Court of Cass County, East Central Judicial District,

the Honorable Steven E. McCullough, Judge.

REVERSED AND REMANDED.

Opinion of the Court by Jensen, Justice.

Charlotte J.S. Rusch (argued) and Whitney M. Irish (on brief), Fargo, ND, for

petitioner, appellant, and cross-appellee.

Shannon M. Gregor (argued) and Cloe A. Kilwein (on brief), Fargo, ND, for

respondents and appellees.
Michael T. Andrews (argued) and Ashley K. Champ (on brief), Fargo, ND, for

respondents, appellees, and cross-appellants.

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Trust of Linn

No. 20180206

Jensen, Justice.

[¶1] Shirley Linn appeals from a district court order denying her petition seeking

a distribution of trust assets, after the court concluded the unambiguous language of

the trust agreement did not compel the requested distributions. Stephen Linn,

Deborah Wagner, and Mark Wagner cross-appeal the district court’s denial of their

request for a recovery of their attorney fees incurred in responding to Shirley Linn’s

petition. We conclude the trust agreement’s language is ambiguous, and we reverse

and remand this case for further proceedings in the district court.

I

[¶2] In March 1978, Roger Linn executed a revocable trust agreement. The trust

was amended and restated in June 2000. The trust provided for the distribution of the

trust property at the time of Roger Linn’s death by dividing the property into two

separate trusts; the Linn Family Trust and the Linn Marital Trust. Roger Linn died

in 2003.

[¶3] Shirley Linn was Roger Linn’s spouse at the time of his death and is a

beneficiary identified in the trust agreement. Stephen Linn, Deborah Wagner, and

Mark Wagner are remainder beneficiaries. Wells Fargo and Harris Widmer were

named as co-trustees of the original revocable trust, the Marital Trust, and the Family

Trust.

[¶4] The trust agreement provided Shirley Linn with the right to choose one of two

residences held by the trust as her principal residence following the death of Roger

Linn. The trust agreement further provided the selected residence would be

maintained for her as long as she resided in the residence.

[¶5] In September 2016, Shirley Linn moved into an assisted living center in Fargo. 

The Marital Trust paid expenses for Shirley Linn to obtain a residential unit, including

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reservation fees, initial rental fees and moving expenses. After moving in, Shirley

Linn requested the co-trustees pay the ongoing monthly living costs charged by the

assisted living facility, in addition to the monthly income distributions she was

receiving from the Marital Trust. The co-trustees continued to make the income

distributions from the Marital Trust, but declined to make additional distributions for

Shirley Linn’s ongoing monthly living costs being charged by the assisted living

facility.

[¶6] Shirley Linn filed a petition with the district court seeking an order requiring

the distribution of trust assets to pay the ongoing monthly living costs charged by the

assisted living facility. The remainder beneficiaries and the co-trustees opposed the

petition.

[¶7] At issue is the trust agreement’s directive to the co-trustees to pay “any

obligations the Donor’s spouse may incur in acquiring assisted living or nursing home

care,” as used in Article V(10)(F) of the trust agreement. The co-trustees and the

remainder beneficiaries contend that the use of the term “acquiring” limits the

directive to the payment of the initial assisted living expenses and excludes the

ongoing monthly living costs charged by the assisted living facility. They assert

Shirley Linn is already receiving income distributions sufficient to pay the assisted

living expenses. Shirley Linn contends, however, that the language is intended to

require distributions sufficient to pay the ongoing monthly living costs charged by the

assisted living facility regardless of the mandatory income distributions.

[¶8] All of the parties have asserted the trust document is unambiguous and must

be read to support their respective positions. Shirley Linn argues, in the alternative,

the trust agreement is ambiguous and the district court should consider extrinsic

evidence to determine Roger Linn’s intent regarding the payment of ongoing assisted

living and nursing home care expenses.

[¶9] Following an evidentiary hearing on the petition, the district court determined

the trust document was unambiguous on its face, held the trust document did not

require the payment of the ongoing monthly assisted living and nursing home care

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expenses, and denied Shirley Linn’s petition. After noting that an award of attorney

fees is discretionary, the district court summarily denied the Linn-Wagners’ request

for a recovery of the attorney fees they incurred in responding to her petition.

II

[¶10] Generally, this Court’s primary objective in construing a trust instrument is to

ascertain the settlor’s intent. Langer v. Pender, 2009 ND 51, ¶ 13, 764 N.W.2d 159;

Alerus Fin., N.A. v. W. State Bank, 2008 ND 104, ¶ 21, 750 N.W.2d 412; Matter of

Estate of Schmidt, 1997 ND 244, ¶ 13, 572 N.W.2d 430. “When a trust instrument

is unambiguous, the settlor’s intent is ascertained from the language of the trust

document itself.” Hecker v. Stark Cty. Soc. Serv. Bd., 527 N.W.2d 226, 230 (N.D.

1994). “Whether or not a trust is ambiguous is a question of law, fully reviewable on

appeal.” Id. “An ambiguity exists when rational arguments can be made in support

of contrary positions as to the meaning of the term, phrase, or clause in question.”

Vanderhoof v. Gravel Prods., Inc., 404 N.W.2d 485, 491 (N.D. 1987) (citing

Heitkamp v. Milbank Mut. Ins. Co., 383 N.W.2d 834 (N.D.1986)).

[¶11] In Langer, 2009 ND 51, ¶¶ 14-15, 764 N.W.2d 159, this Court discussed the

rules for construing trust documents and recognized that the “[g]eneral rules of

construction of written documents apply to the construction of trust instruments.”

Interpretation of a contract is governed by N.D.C.C. ch 9-07. Hallin v. Inland Oil &

Gas Corp., 2017 ND 254, ¶ 9, 903 N.W.2d 61. In applying chapter 9-07, N.D.C.C.,

this Court has stated:

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.” THR Minerals[, LLC v.

Robinson], 2017 ND 78, ¶ 8, 892 N.W.2d 193 (quoting Border Res.,

LLC v. Irish Oil & Gas, Inc., 2015 ND 238, ¶ 15, 869 N.W.2d 758). 

When an agreement has been memorialized in a clear and unambiguous

writing, extrinsic evidence should not be considered to ascertain intent. 

Golden [v. SM Energy Co.], 2013 ND 17, ¶ 11, 826 N.W.2d 610. 

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When a contract’s language is plain and unambiguous and the parties’

intentions can be ascertained from the writing alone, extrinsic evidence

is not admissible to alter, vary, explain, or change the contract. Nichols

[v. Goughnour], 2012 ND 178, ¶ 12, 820 N.W.2d 740. If a contract is

ambiguous, extrinsic evidence may be considered to determine the

parties’ intent, and the contract terms and parties’ intent become

questions of fact. Border Res., at ¶ 15.

Hallin, at ¶ 9.

“A contract must receive such an interpretation as will make it

lawful, operative, definite, reasonable, and capable of being carried into

effect, if it can be done without violating the intention of the parties.”

N.D.C.C. § 9-07-08. “Particular clauses of a contract are subordinate

to its general intent.” N.D.C.C. § 9-07-15 (emphasis added).

“Repugnancy in a contract must be reconciled, if possible, by such an

interpretation as will give some effect to the repugnant clause

subordinate to the general intent and purposes of the whole contract.”

N.D.C.C. § 9-07-17. “Words in a contract which are inconsistent with

its nature or with the main intention of the parties are to be rejected.”

N.D.C.C. § 9-07-18 (emphasis added).

Langer, at ¶ 15.

[¶12] Here, the district court held Roger Linn’s intent was plain and unambiguous

from the agreement’s language. The court concluded Article V of the agreement

plainly provides for the payment of Shirley Linn’s “obligations to ‘acquire’ assisted

living or home care,” but there is “no indication in the unambiguous trust agreement”

the trust must also provide “directly for her assisted living expenses as well.” The

court noted that in addition to Article V, Article VII provides all net income for the

Linn Marital Trust is to be paid to her during her lifetime and that both of the

mandatory distributions have been followed. The court determined that while Articles

VI and VII provide the co-trustees with discretion to make a distribution to Shirley

Linn for her reasonable comfort and support, the co-trustees have not found additional

distributions to be necessary in light of Shirley Linn’s continued receipt of the

mandatory income distributions. The court held the language gave the co-trustees

“the discretion to weigh Shirley’s situation, her property and income, and determine

whether or not additional distributions are necessary and appropriate” and the

co-trustees continue to have that discretion.

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III

[¶13] Shirley Linn argues the district court erred in concluding the trust’s directive

to the co-trustees to pay “any obligations the Donor’s spouse may incur in acquiring

assisted living or nursing home care” excluded the ongoing assisted living and nursing

home costs. She argues it is clear from the trust agreement, when read as a whole,

Roger Linn’s intent was to provide for all of her housing, including her assisted living

and nursing home care. She contends the language of Articles V(10)(F); VII(1), (2);

and VI(2)(D), when read together, requires her assisted living or nursing home care

obligations to be paid by either the Linn Marital Trust or the Linn Family Trust

without consideration of the mandatory income distributions already being paid. 

Moreover, she contends the limit on access to the Linn Marital Trust principal in

Article VII(2) was not intended to apply to Article V(10)(F).

[¶14] Shirley Linn also argues the district court erred in finding the use of the word

“acquiring” clearly showed Roger Linn’s intent was not to pay for her ongoing

assisted living or nursing home care. She asserts the word “acquiring” is ambiguous

and includes obligations, such as rent, that she must pay to obtain assisted living each

month. Further, she argues the court erred by relying on one word rather than the

trust as a whole.

[¶15] The co-trustees argue the trust agreement does not require the co-trustees to

pay Shirley Linn’s ongoing assisted living expenses unless the express standards for

invading trust principal are met. They agree the co-trustees are required to pay the

necessary expenses to acquire an assisted living “unit,” but they do not read Article

V(10)(F) as a mandatory directive to pay for the ongoing expenses of assisted living

and nursing home care.

[¶16] In support, the co-trustees assert that a separate trust does not exist for her

assisted living or nursing home care, that mandatory principal payments from either

trust for ongoing assisted living expenses contravenes the existing terms for invasion

of the trust principal, and that Roger Linn intended the trust only acquire assisted

living or nursing home care for Shirley Linn. They assert that, after the initial

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acquisition, the marital trust’s net income—enhanced by the home sale and reduction

of trust expenses—may be used to maintain her assisted living and nursing home care,

and only if those funds are insufficient, should discretionary distributions of principal

be used to pay the ongoing expenses of assisted living and nursing home care. They

contend that because the language is plain and unambiguous, extrinsic evidence

cannot be considered to create an ambiguity.

[¶17] The remainder beneficiaries make many of the same arguments as the

co-trustees, also focusing on the trust agreement’s use of “acquiring,” as opposed to

“maintaining,” when referring to trust obligations. The remainder beneficiaries

contend the trust clearly differentiates between acquiring and maintaining certain

property. They assert Shirley Linn’s assisted living expenses are subject to the trust’s

conditions and limitations on invading the trust principal. They assert where a

beneficiary’s right to demand trust principal is qualified, the trustee owes the other

beneficiaries a duty to make some investigation to learn whether the condition

precedent to the right to principal exists.

[¶18] From our review of the trust agreement, in light of the parties’ arguments, we

conclude the parties have posited rational arguments for different interpretations of

the trust agreement. We, therefore, conclude the trust agreement’s directive for the

co-trustees to pay “any obligations the Donor’s spouse may incur in acquiring assisted

living or nursing home care” is ambiguous, thus creating an issue of fact about Roger

Linn’s intent with regard to the trust’s obligation to provide for Shirley Linn’s

ongoing assisted living expenses. The district court is required to make factual

findings regarding Roger Linn’s intent with regard to the ambiguous language and is

free to consider extrinsic evidence to aid in making those findings.

[¶19] The remainder beneficiaries argue the district court erred in the denial of their

request to recover attorney fees incurred in responding to Shirley Linn’s petition.

Because we remand this case to the district court for additional findings regarding

Roger Linn’s intent, which may or may not result in the same conclusion being

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reached by the district court, the recovery of attorney fees should also be reconsidered

by the district court on remand.

[¶20] The directive to the co-trustees to pay “any obligations the Donor’s spouse

may incur in acquiring assisted living or nursing home care” is ambiguous. We

reverse and remand this case to the district court to make findings on the evidence

regarding Roger Linn’s intent with regard to the payment of the ongoing assisted

living and nursing home care expenses and to make further findings regarding the

remainder beneficiaries’ request for a recovery of attorney fees.

IV

[¶21] The district court order is reversed, and the case is remanded for further

proceedings consistent with this opinion.

[¶22] Jon J. Jensen

Lisa Fair McEvers

Jerod E. Tufte

Anthony S. Benson, D.J.

Gerald W. VandeWalle, C.J.

[¶23] The Honorable Anthony S. Benson, D.J., sitting in place of Crothers, J.,

disqualified.

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