Filed 5/7/20 by Clerk of Supreme Court

IN THE SUPREME COURT

STATE OF NORTH DAKOTA

2020 ND 83

Shadow Industries, LLP, Plaintiff and Appellant

v.

David Hoffman, an individual and

Christopher Hoffman, an individual, Defendants and Appellees

and

Any other occupants, Defendants

No. 20190231

Appeal from the District Court of Williams County, Northwest Judicial 

District, the Honorable Benjamen J. Johnson, Judge.

REVERSED AND REMANDED.

Opinion of the Court by Jensen, Chief Justice.

Kevin J. Chapman (argued) and Kari L. Jensen (on brief), Williston, ND, for

plaintiff and appellant.

Ryan Geltel, Williston, ND, for defendants and appellees.
1

Shadow Industries, LLP v. Hoffman

No. 20190231

Jensen, Chief Justice.

[¶1] Shadow Industries, LLP, appeals from the judgment of the district court 

dismissing its eviction action and holding the tenants David Hoffman and 

Chris Hoffman had timely exercised their option to extend the term of the 

parties’ lease agreement. Shadow argues the district court erred in finding the 

parties’ lease agreement to be ambiguous, finding the option to extend the lease 

expired on February 1, 2019, and finding the Hoffmans timely exercised their 

option to extend the lease. We reverse and remand.

I

[¶2] In December 2008, the Hoffmans entered into an agreement to lease 

farmland from Dwight Aune. The term of the lease was stated as “the next ten 

crop years, which would be through the 2018 crop year.” The lease also 

provided the Hoffmans “the option of an additional 10 years for crop years 

2019-2028.” One-half of the rental payment for each crop year was due on 

February 1 and the second half due on December 1 each year. Aune 

subsequently transferred ownership of the farmland and his rights under the 

terms of the agreement to Shadow, a limited liability partnership controlled by 

Aune.

[¶3] After removing their crop in the fall of 2018, the Hoffmans deep ripped 

the land, tilled to create fall bedding, and applied fertilizer. On January 4, 

2019, Shadow filed a notice of termination of the lease with the county 

recorder’s office. On January 14, 2019, Shadow sent notice to the Hoffmans the 

lease had been terminated. On January 29, 2019, the Hoffmans wrote to 

Shadow indicating they were electing to exercise their option to extend the 

lease for an additional ten years and tendered payment for one-half of the 2019 

rent. Shadow refused the payment and initiated eviction proceedings.

[¶4] The district court noted “the determinative issue is whether or not the 

lease was terminated or expired” and found the lease did not “specify a date by 

which the option must be exercised.” The court further found the lease to be 
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“ambiguous as to when the initial term was to end . . . .” After finding the 

ambiguity should be construed against Shadow, the court summarized its 

ruling as follows:

[t]he contract allows for the Defendants [Hoffmans] to exercise the 

option by making a payment in an amount equal to the average 

2018 Williams County cropland rates as reported by the North 

Dakota Agricultural Statistics Services by February 01, 2019, the 

date that the first rental payment would be due [for the 2019 crop 

year]. Since the option did not expire until after February 1, 2019, 

the Plaintiff had no authority to terminate the agreement on 

December 31, 2018. It appears to this Court that the Defendants 

did attempt to exercise the option after December 31, 2018 but 

before February 01, 2019.

II

[¶5] Hoffman asserts the district court erred in finding that the phrase 

“through the 2018 crop year” creates ambiguity as to when the initial ten year 

term of the lease ended. Hoffman argues the phrase “through the 2018 crop 

year” is not ambiguous. The rules of contract interpretation apply to leases.

Langer v. Bartholomay, 2008 ND 40, ¶ 12, 745 N.W.2d 649. The interpretation 

of a contract is a question of law. Bearce v. Yellowstone Energy Dev., LLC, 2019 

ND 89, ¶ 14, 924 N.W.2d 791. “On appeal, this Court independently examines 

and construes the contract to determine if the district court erred in its 

interpretation.” Id.

[¶6] The district court’s interpretation of the lease as having ambiguity as to 

when the lease terminated was premised upon the court’s observation that 

“[w]hen ‘crop years’ end and begin is undefined.” We disagree with the court 

the lease is ambiguous and fails to define the end of the lease. The lease 

terminated at the end of the 2018 crop year. While determining when the end 

of the 2018 crop year occurred may be a question of fact, the term is not 

ambiguous simply because it requires a future event or contingency.

[¶7] Aune testified the crop year ended no later than the end of October 2018. 

Following the harvesting of their crops and still in 2018, the Hoffmans deep 

ripped the land, tilled to create fall bedding, and applied fertilizer to prepare 
3

for the 2019 crop year. On the basis of these facts, and the absence of any 

contrary facts in the record, we conclude as a matter of law the 2018 crop year 

ended and the lease terminated in 2018.

[¶8] The district court found the Hoffmans exercised the option during 

January 2019. Because the facts of this case compel a finding the 2018 crop 

year ended in 2018 and the lease terminated at the end of the 2018 crop year, 

the exercise of the option in January 2019 was not timely and the lease 

terminated.

III

[¶9] We reverse the judgment of the district court and remand for further 

proceedings consistent with termination of the lease prior to the exercise of the 

option by the Hoffmans.

[¶10] Jon J. Jensen,

C.J. Daniel J. Crothers

Gerald W. VandeWalle

Dale V. Sandstrom, S.J.

Jerod E. Tufte

[¶11] The Honorable Dale V. Sandstrom, Surrogate Judge, sitting in place of 

McEvers, J., disqualified.