### Filed 3/22/19 by Clerk of Supreme Court
IN THE SUPREME COURT
STATE OF NORTH DAKOTA

2019 ND 89

Daniel T. and Debra Ann Bearce, Plaintiffs and Appellants

v. Yellowstone Energy Development, LLC, Acting By and Through Its Board of Directors, Defendant and App ellee

No. 20180256

Appeal from the District Court of Williams County, Northwest Ju dicial District, the Honorable Joshua B. Rustad, Judge.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
Opinion of the Court by Jensen, Justice

. Charles L. Neff, Williston, ND, for plaintiffs and appellants.
Kent A. Reierson (argued) and Trevor A. Hunter (on brief), Will iston, ND, for defendant and appellee.Bearce v. Yellowstone Energy Dev., LLC
No. 20180256

Jensen, Justice. [¶1] Daniel and Debra Bearce (“the Bearces”) appeal from a judgm ent in favor of Yellowstone Energy Development LLC (“Yellowstone”) entered foll owing the parties’ cross motions for summary judgment. The Bearces chall enge the district court’s exclusion of parol evidence to support their allegationof fraud in the inducement. The Bearces also challenge the district court’s co nclusion the Bearces were not owed a fiduciary duty. We affirm the district court’s judgment dismissing
the Bearces’ claim for fraud and their claim for breach of contract. We reverse the
district court’s dismissal of the Bearces’ claim for breach of a fiduciary duty and remand for further proceedings consistent with this opinion.
I. [¶2] In June 2006, representatives of a business entity that wou ld eventually
become Yellowstone went to the home of Daniel and Debra Bearce seeking to purchase 170 acres of land owned by the Bearces. Yellowstone s uccessfully secured an exclusive option to purchase the land. [¶3] In 2008, Yellowstone exercised its option to purchase the l and and the parties entered into a contract for deed. In 2009, Yellowstone and the Bearces modified the contract for deed to alter some of the payment terms. Both the original contract for
deed and the 2009 modified contract for deed included the follo wing term providing for the payment of a portion of the purchase price with “shares ” of a contemplated ethanol plant:
In addition to the cash amounts st ated above, the Sellers shall receive shares in the Buyer’s limited liability company totaling a valu e of $100,000.00, in the name of the Sellers, to be delivered follow ing financial close of the financing for the Buyer’s ethanol plant to be constructed upon the above described real property.

1(Emphasis added). [¶4] Yellowstone subsequently abandoned its plan to build an eth anol plant on the Bearces’ land. Yellowstone then negotiated a long-term lease w ith a third party to build an oil train loading facility on the Bearces’ land. [¶5] In July 2010, Yellowstone sent a letter to the Bearces advi sing them their $100,000 in “value” would be issued despite Yellowstone’s aband onment of the plan to build an ethanol plant. The letter stated ownership units h ad not yet been issued and explained the Bearces would receive their ownership interes t “at the time shares are issued to all its members.” Shortly after receiving that l etter, the Bearces executed and delivered a deed for the property to Yellowstone. [¶6] In December 2011, the Yellowstone Board of Directors approv ed a multiplier of three units per $1 invested for individuals who had provided initial cash investment in Yellowstone. The Bearces’ interest in Yellowstone was not g iven the 3:1 multiplier. In October 2012, the Yellowstone Board of Director s approved a second multiplier of three units per $1 invested for individuals who h ad initially provided
cash investment in Yellowstone. The Bearces’ interest in Yello wstone was not given the second 3:1 multiplier. [¶7] Units representing ownership interest in Yellowstone were a llocated and placed on a ledger sometime after December 4, 2012. After rece iving a “unit ledger” indicating their interest in Yellowstone would not receive the 3:1 multiplier, the Bearces objected. Despite the objection, Yellowstone refused t o apply the 3:1 multiplier to the Bearces’ interest in Yellowstone. [¶8] The Bearces sued Yellowstone asserting claims for breach of fiduciary duty, fraudulent inducement, and breach of contract. Both parties mo ved for summary judgment. The district court denied the Bearces’ motion for summary judgment and granted Yellowstone’s motion for summary judgment.

2[¶9] On appeal, the Bearces challenge the district court’s deter mination the parol evidence rule precluded communications between the Bearces and Yellowstone from being considered to support their claim asserting they were fraudulently induced into entering into the August 25, 2009 modified contract for deed. The Bearces also challenge the court’s determination that Yellowstone did not br each a fiduciary duty to the Bearces by excluding their equity interest from the 3:1 multiplier.
II. [¶10] The Bearces argue they we re fraudulently induced by Yellow stone to enter into the August 25, 2009 modified contract for deed, and therefore the parol evidence rule should not apply to statements made by Yellowstone. The Bearce s assert a Yellowstone representative stated their shares in Yellowstone w ould be treated the same as the other investors. The Bearces have not sought to re scind the parties’ agreement. The district court held this statement was barred b y the parol evidence rule with respect to the Bearces’ claim asserting fraudulent in ducement in the August 25, 2009 modified contract for deed. [¶11] The decision to admit parol evidence is a question of law, fully reviewable on appeal. E.g., Finstad v. Gord , 2014 ND 72, ¶ 13, 844 N.W.2d 913; Myaer v. Nodak
Mut. Ins. Co. , 2012 ND 21, ¶ 20, 812 N.W.2d 345. The parol evidence rule is codified in N.D.C.C. § 9-06-07 and reads: The execution of a contract in writing, whether the law require s it to be written or not, supersedes all the oral negotiations or stipulations concerning its matter which preceded or accompanied the executi on of the instrument. Parol evidence generally cannot be used to vary or contradict the terms of a complete, written contract adopted as a definite expression of the partie s’ agreement. Finstad , at ¶ 13; Myaer , at ¶ 20. This Court has clar ified, however, that parol evide nce may be considered when the written agreement does not reflect the p arties’ intent because of fraud, mistake, or accident. Finstad, at ¶ 13; Myaer , at ¶ 20.

3[¶12] The Bearces argue Yellowstone’s statement that they would be treated the same as other investors fraudulently induced them to enter into the modified contract for deed dated August 25, 2009. Parol evidence of fraudulent i nducement is only admissible to challenge the validity of a contract and a corres ponding request for the remedy of rescission. See Golden Eye Res., LLC v. Ganske , 2014 ND 179, ¶ 17, 853 N.W.2d 544. The Bearces are not seeking recision of the August 25, 2009 modified contract for deed. In the absence of a request to rescind the August 25, 2009 modified contract for deed, the district court properly excluded the par ol evidence for the purpose of supporting the Bearces’ fraud claim. We affirm the d istrict court’s judgment dismissing the Bearces’ fraud claim.
III. [¶13] The parties’ original agreement and the first modificationof that agreement required $100,000 of the purchase price to be paid through the issuance of equity in a limited liability company that would be constructing an ethan ol plant. In the summer of 2010, Yellowstone informed the Bearces that the ethan ol plant would not be built. The district court determined Yellowstone’s obligati on to pay the $100,000 of equity to the Bearces was a condition precedent, only payabl e “if” the ethanol plant was financed, and was payable “only upon” the financing of the ethanol plant. [¶14] The interpretation of a contract is a question of law. Flaten v. Couture , 2018 ND 136, ¶ 14, 912 N.W.2d 330. On appeal, this Court independently examines and
construes the contract to determine if the district court erred in its interpretation. Id

. [¶15] The $100,000 of equity promised to the Bearces represented roughly 16% of the total purchase price for the land. Nothing in the provisio n related to the payment of the $100,000 of equity expressly provides that in the event the ethanol plant is not built that the Bearces would forego 16% of the purchase price f or the property. The provision does not include the contingency language suggested b y the district court that the payment was only due “if” financing for the ethanol pl ant was secured or “only upon” securing financing for the ethanol plant.
4[¶16] The district court determin ed, and the Bearces argue, that securing financing for the ethanol plant was a condition precedent. Section 9-01-1 1, N.D.C.C., defines a condition precedent: A condition precedent is a condition which is to be performed b efore some right dependent thereon accrues or some act dependent ther eon is performed. Section 9-01-16, N.D.C.C., provides: Before any party to an obligation can require another party to perform any act under it, that party shall fulfill all conditions prece dent thereto imposed upon that party . . . . Sections 9-01-11 and 9-01-16, N.D.C.C., recognize parties are f ree to place conditions precedent on the performance of the ir respective contractual ob ligations. Bishop Ryan High School v. Lindberg , 370 N.W.2d 726, 729 (N.D. 1985). This Court has recognized that performance of a condition precedent may be a p rerequisite to
existence of an enforceable contract. United Bank of Bismarck v. Trout , 480 N.W.2d 742, 748 (N.D. 1992); Kruger v. Soreide , 246 N.W.2d 764, 769 (N.D. 1976); Quinn Distrib. Co. v. North Hill Bowl, Inc. , 139 N.W.2d 860, 863-64 (N.D. 1966). [¶17] Although our prior caselaw d iscussing conditions precedent has primarily dealt with whether the failure of a condition precedent prevented the existence of an enforceable contract, the failure of a condition precedent does not preclude the parties from continuing with their agreement. A condition precedent may be waived “either expressly or by implication resulting from acts or conduct, by the party in whose favor they are made.” Wachter v. Gratech Co., Ltd., 2000 ND 62, ¶ 22, 608 N.W.2d 279. Additionally, parties may enter into an accord when one party i s willing to “accept in extinction of an obligation something different from or less th an that to which the person agreeing to accept is entitled.” N.D.C.C. § 9-13-04. S imilarly, the parties may enter into a novation and substitute a new obligation for an ex isting one. N.D.C.C. § 9-13-08. See Herb Hill Ins., Inc. v. Radtke , 380 N.W.2d 651, 654 (N.D. 1986) (comparing the legal theories of novation and accord).

5[¶18] Here, the parties agreed to continue with the sale of the real property to Yellowstone after disclosure to the Bearces that the ethanol pl ant would not be built. The Bearces unambiguously expressed their agreement to continue with the sale of the real property by executing and delivering a deed to Yellows tone. Yellowstone unambiguously agreed to continue by accepting the deed and not demanding a return of the prior cash payments made to the Bearces. Despite the fa ilure of the condition precedent, the parties agreed to continue with the sale of the land from the Bearces to
Yellowstone. [¶19] While the parties’ agreement to continue with the sale and purchase of the land is clear, Yellowstone’s obligation(s) following the decision no t to build the ethanol plant is not certain. Prior to the Bearces’ transfer of the re al property to Yellowstone, the Bearces received the July 2010 letter informing them they w ould still receive their shares “at the time shares are issued to all its members,” even though the ethanol plant was not being built. The Bearces argue the July 2010 letter re presents the substituted conditions under which they agreed to continue with the agreeme nt—a novation. Yellowstone argues the Bearces continued with the agreement by accepting less than they had originally been entitled—an accord. The district court’s determination that the payment of $100,000 was conditional or a contingency and it s conclusion that the Bearces were not entitled to any equity payment, is effectivelythe same as Yellowstone’s argument there was an accord which provided the B earces would accept less than they were originally entitled. [¶20] We have previously recognized that “[u]nless the evidence in a case is such that reasonable persons can draw but one conclusion, the questi on whether or not there has been an accord and satisfaction is a question of fact .” Herb Hill , 380 N.W.2d at 654 (citing Shirazi v. United Overseas, Inc. , 354 N.W.2d 651, 654 (N.D. 1984); Hall GMC, Inc. v. Crane Carrier Co. , 332 N.W.2d 54, 61 (N.D. 1983)). “Likewise, the question of whether or not there has been a novation is a question of fact if the evidence is such that reasonable persons can draw m ore than one
6conclusion.” Id . (citing Navine v. Peltier , 48 Wis.2d 588, 180 N.W.2d 613, 616 (1970); Hyde v. Hyde , 78 S.D. 176, 99 N.W.2d 788, 791-92 (1959)). Both parties have presented reasonable explanations of the terms of their co ntinuing agreement following the disclosure that the ethanol plant would not be bu ilt. Because reasonable persons can draw more than one conclusion, the entry of summaryjudgment was not appropriate and this case must be remanded for a determination of the terms under which the parties agreed to continue their agreement. Question s of fact remain regarding the terms, if any, of the parties’ agreement to conti nue the transaction following the disclosure that the ethanol plant would not be bu ilt and whether the parties each satisfied those terms.
IV. [¶21] The Bearces argue the district court erred, as a matter of law, in determining Yellowstone did not breach a fiduciary duty to the Bearces when Yellowstone multiplied the investment of initial cash investors by three, b ut did not multiply the Bearces’ interest in Yellowstone by three. They argue that as a result, their ownership interest was improperly diluted. The Bearces’ challenge is limited to the court’s determination that no dilution had occurred. The Bearces’ argument is dependent upon the contract for deed having been completed and a subseque nt fiduciary duty arising from their ownership of an interest in Yellowstone. [¶22] The timing of the events is undisputed. A deed was delive red to Yellowstone on August 3, 2010. In December 2011 and October 2012, the Yell owstone Board of Directors approved the 3:1 multiplier for the initial and addit ional cash investors. In December 2012, the units representing ownership interests in Ye llowstone were allocated. Upon allocation of the units, the cash investors re ceived three units for every dollar they invested and the Bearces received one unit fo r each dollar of the $100,000 in value they were to be paid under the terms of the c ontract for deed. [¶23] The district court determined the contract for deed was un ambiguous, and it did not require payment of the $100,000 of value in Yellowstone until allocation of
7the units in December 2012. The interpretation of a contract i s a question of law.
Flaten , 2018 ND 136, ¶ 14, 912 N.W.2d 330. On appeal, this Court ind ependently
examines and construes the contract to determine if the distric t court erred in its interpretation. Id

. [¶24] Although referenced as “shares” rather than “units,” the o wnership interests in Yellowstone were ultimately distributed as units of a limite d liability company. The contract for deed expressly sets the date of the payment of the units as the “financial close of the financing for the Buyer’s ethanol plant .” However, because of the failure of the condition pr ecedent, that event never occ urred and will never

occur. [¶25] The Bearces argue Yellowstone’s purchase of the property w as completed on August 3, 2010, when they executed a deed transferring the prop erty to Yellowstone,
and their investment in Yellowstone vested at that time. The B earces further contend that because their interest had vested, the subsequent applicat ion of the multipliers to
cash investors diluted their interest in Yellowstone. That is a reasonable interpretation and is supported by the district court’s findingof fact which provides that “Yellowstone Energy completed the purchase of the Subject Property on August 3, 2010.” [¶26] In contrast, the district court, relying in part on the language of the failed condition precedent, implicitly concludes that December 2012, when the units were issued, was the date the payment of the units to the Bearces wa s made. The court thereafter concludes the simultaneous issuance of units preclud es a finding that the
Bearces’ interest was diluted. That is also a reasonable inter pretation of the parties’ agreement following the failure of the condition precedent. [¶27] The district court’s interpretation is reasonable. Howeve r, the Bearces’ interpretation is also reasonabl e. “[A] contr act is ambiguous when reasonable arguments can be made for different positions on its meaning.” Moen v. Meidinger , 547 N.W.2d 544, 547 (N.D. 1996). Because there are two reasonable interpretations
8of when the payment of the units was to be made following the f ailure of the condition precedent, the terms for continuation of the contract for deed were ambiguous. [¶28] We do not know what conclusion the district court would have made regarding dilution if it were to conclude the payment of the units to the Bearces occurred on August 3, 2010. While the court properly excluded parol eviden ce with regard to the Bearces’ allegation of fraud, that evidence may be considered when the written agreement does not reflect the parties’ intent because of ambiguity. Finstad , 2014 ND 72, ¶ 13, 844 N.W.2d 913; Myaer , 2012 ND 21, ¶ 20, 812 N.W.2d 345. In light of the ambiguity in the parties’ agreement following the parties’ cont inuation of the contract for deed after the failure of the condition precedent, on reman d, it will be appropriate
for the district court to consider extrinsic evidence in determ ining when the payment of the Bearces’ interest in Yellowstone was made; what, if any, fiduciary duty would have arisen if the payment was made in August 2010; and whether any existing fiduciary duty would have been breached by application of the m ultipliers to only
cash investors.
V. [¶29] In their complaint, the Bearces alleged that Yellowstone h ad breached provisions of its proposed bylaws and member control agreement. The district court’s judgment dismissed the Bearces’ claim for breach of contract. The Bearces did not brief or otherwise challenge the court’s dismissal of their bre ach of contract claim. The Bearces waived, on appeal, any issue regarding the breach o f contract claim by not providing supporting argument and, without supportive reaso ning or citations to relevant authorities, an argument is without merit. Interest of J.J.T. , 2018 ND 165, ¶ 29, 915 N.W.2d 106.
VI. [¶30] The district court’s exclusion of parol evidence regardingthe Bearces’ allegation of fraud in the inducem ent was correct, and we affir m the district court’s
9judgment dismissing the Bearces’ claim for fraud. The Bearces waived any issue regarding their breach of contract claim, and we affirm the dis trict court’s judgment dismissing the Bearces’ breach of contract claim. The district court erred in its determination that the contract for deed was unambiguous with r egard to the parties’ obligations after the failure of the condition precedent. We r everse and remand for further proceedings to determine when the Bearces acquired thei r interest in Yellowstone and, if that interest was acquired in August 2010, whether a fiduciary duty was owed to the Bearces, and if so, whether the fiduciary duty was breached in the subsequent 3:1 multiplier for cash investments. [¶31] Jon J. Jensen Daniel J. Crothers Jerod E. Tufte William A. Neumann, S.J. Gerald W. VandeWalle, C.J.

[¶32] The Honorable William A. Neumann, S.J., sitting in place o f McEvers, J., disqualified.

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