### 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, decease d
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, Res pondents 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 Jud icial 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.

2Trust of Linn
No. 20180206

Jensen, Justice. [¶1] Shirley Linn appeals from a district court order denying he r 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 cr oss-appeal the district court ’s denial of their request for a recovery of their attorney fees incurred in respo nding to Shirley Linn’s petition. We conclude the trust agreement’s language is ambigu ous, and we reverse and remand this case for further proceedings in the district co urt.

I [¶2] In March 1978, Roger Linn executed a revocable trust agreem ent. 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 th e property into two separate trusts; the Linn Family Trust and the Linn Marital Tru st. 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, D eborah Wagner, and Mark Wagner are remainder beneficiaries. Wells Fargo and Harri s Widmer were named as co-trustees of the original revocable trust, the Marit al 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 followi ng the death of Roger Linn. The trust agreement further provided the selected reside nce would be maintained for her as long as she resided in the residence. [¶5] In September 2016, Shirley Linn moved into an assisted livi ng center in Fargo. The Marital Trust paid expenses for Shirley Linn to obtain a re sidential unit, including

1reservation fees, initial rental fees and moving expenses. Afte r moving in, Shirley Linn requested the co-trustees pay the ongoing monthly living c osts charged by the assisted living facility, in addition to the monthly income dis tributions she was receiving from the Marital Trust. The co-trustees continued to make the income distributions from the Marital Trust, but declined to make addi tional distributions for Shirley Linn’s ongoing monthly living costs being charged by th e assisted living facility. [¶6] Shirley Linn filed a petition with the district court seeki ng an order requiring the distribution of trust assets to pay the ongoing monthly liv ing 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-trust ees 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 “acqui ring” limits the directive to the payment of the initial assisted living expense s and excludes the ongoing monthly living costs charged by the assisted living fac ility. They assert Shirley Linn is already receiving income distributions sufficie nt to pay the assisted living expenses. Shirley Linn contends, however, that the lang uage is intended to require distributions sufficient to pay the ongoing monthly liv ing costs charged by the assisted living facility regardless of the mandatory income dis tributions. [¶8] All of the parties have asserted the trust document is unam biguous and must be read to support their respective positions. Shirley Linn ar gues, 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 distr ict 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

2expenses, 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 respondingto 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 la nguage 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 l aw, 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 po ssible. N.D.C.C. § 9-07-04. “The language of a contract is to govern i ts interpretation if the language is clear and explicit and does n ot 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 unambigu ous writing, extrinsic evidence should not be considered to ascerta in intent. Golden [ v. SM Energy Co. ] , 2013 ND 17, ¶ 11 , 826 N.W.2d 610.
3When 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 contra ct. Nichols [ v. Goughnour ] , 2012 ND 178, ¶ 12 , 820 N.W.2d 740. If a contract is ambiguous, extrinsic evidence may be considered to determine th e parties’ intent, and the contract terms and parties’ intent bec ome 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 c arried into effect, if it can be done without violating the intention of th e parties.” N.D.C.C. § 9-07-08. “Particular clauses of a contract are subo rdinate to its general intent. ” N.D.C.C. § 9-07-15 (emphasis added). “Repugnancy in a contract must be reconciled, if possible, by s uch 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 plai n and unambiguous from the agreement’s language. The court concluded Article V o f 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 unambi guous trust agreement” the trust must also provide “directly for her assisted living e xpenses 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 b een followed. The court determin ed that while Articles VI and VII provide the co-trustees with discretion to make a di stribution 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 appro priate” and the
co-trustees continue to have that discretion.
4III [¶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 m ay incur in acquiring assisted living or nursing home care” excluded the ongoing assi sted living and nursing home costs. She argues it is clear from the trust agreement, w hen read as a whole, Roger Linn’s intent was to provide for all of her housing, incl uding 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 alr eady 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 findi ng the use of the word “acquiring” clearly showed Roger Linn’s intent was not to pay f or her ongoing assisted living or nursing home care. She asserts the word “ac quiring” is ambiguous and includes obligations, such as rent, that she must pay to ob tain assisted living each month. Further, she argues the court erred by relying on one w ord 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 th ey do not read Article V(10)(F) as a mandatory directive to pay for the ongoing expens es of assisted living and nursing home care. [¶16] In support, the co-trustees assert that a separate trust d oes not exist for her assisted living or nursing home care, that mandatory principal payments from either trust for ongoing assisted living expenses contravenes the exis ting 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

5acquisition, the marital trust’s net income—enhanced by the hom e 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 nurs ing home care. They contend that because the language is plain and unambiguous, ext rinsic evidence cannot be considered to create an ambiguity. [¶17] The remainder beneficiaries make many of the same argument s as the co-trustees, also focusing on the trust agreement’s use of “acq uiring,” as opposed to “maintaining,” when referring to trust obligations. The remain der 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. Th ey 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 whethe r 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 differ ent interpretations of the trust agreement. We, therefore, conclude the trust agreeme nt’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 iss ue 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 requir ed to make factual findings regarding Roger Linn’s intent with regard to the ambig uous language and is free to consider extrinsic evidence to aid in making those find ings. [¶19] The remainder beneficiaries argue the district court erred in the denial of their request to recover attorney fees incurred in responding to Shir ley Linn’s petition.
Because we remand this case to the district court for additiona l findings regarding Roger Linn’s intent, which may or may not result in the same co nclusion being

6reached by the district court, the recovery of attorney fees sh ould 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 find ings 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 findi ngs regarding the remainder beneficiaries’ request for a recovery of attorney fee s.

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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