Court Opinion

ID: 4709262
Source: CourtListenerOpinion
Date Created: 2021-08-05 14:09:00.964602+00
Date Added: 2024-06-11T08:06:55.338423
License: Public Domain

FILED
                                                                 IN THE OFFICE OF THE
                                                              CLERK OF SUPREME COURT
                                                                     AUGUST 5, 2021
                                                               STATE OF NORTH DAKOTA

                 IN THE SUPREME COURT
                 STATE OF NORTH DAKOTA

                               2021 ND 139

Timothy S. Dwyer, a/k/a Tim Dwyer, Jr.,            Plaintiff, Appellant,
                                                   and Cross-Appellee
     v.
Margret Sell, Co-Trustee of the Tim
Dwyer Farm Trust; John Dwyer,
Co-Trustee of the Tim Dwyer Farm
Trust; Jane Dwyer Morgan; Barbara
Dwyer Rice; Peggy Dwyer Sell a/k/a
Margret Sell; John W. Dwyer a/k/a
John Dwyer,                                     Defendants, Appellees,
                                                 and Cross-Appellants
     and
Patrick Sell; Johnny Dwyer; Molly
Binger; Olin Sell; Dana Dwyer; Ingrid
Kalinowski a/k/a Ingrid A. Sell; Andy
Dwyer; Jack Dwyer; Rachel Meuchel;
Dan Dwyer; Tommy Dwyer; Joey
Dwyer; Sadie Bro,                             Defendants and Appellees
     and
Ruth Dwyer Coleman; Michael A. Dwyer;
Sarah Grossman; Johnny Coleman;
Sam Coleman; Josh Dwyer; Katie
Montplaisir; Anne Dwyer; Billy Morgan;
Katie Joraanstad; Mike Morgan; Judah
Coleman; Beky Olson; Will Rice; Janna
Schmidt; Paul Rice; Charles Coleman;
David Morgan; Taylor Dwyer; Tessa Dwyer;
Teddi Dwyer; Tianna Dwyer,                                 Defendants

                               No. 20200188
Appeal from the District Court of McKenzie County, Northwest Judicial
District, the Honorable Daniel S. El-Dweek, Judge.

AFFIRMED.

Opinion of the Court by Crothers, Justice.

Dwight C. Eiken, Williston, ND, and Seymour R. Jordan, Crosby, ND, for
plaintiff, appellant, and cross-appellee.

Craig E. Johnson, Fargo, ND, for defendants, appellees, and cross-appellants
Margret Sell and John Dwyer, as Co-Trustees of the Tim Dwyer Farm Trust,
and Peggy Dwyer Sell, a/k/a Margret Sell, and John W. Dwyer, a/k/a John
Dwyer, individually.

James A. Lodoen, Minneapolis, MN, for defendants, appellees, and cross-
appellants Jane Dwyer Morgan and Barbara Dwyer Rice.

Joseph M. Barnett and Klay C. Ahrens, Edina, MN, for defendants and
appellees Patrick Sell, Johnny Dwyer, Molly Binger, Olin Sell, and Dana
Dwyer.

Sean T. Foss, Fargo, ND, for defendants and appellees Andy Dwyer, Jack
Dwyer, Rachel Meuchel, Dan Dwyer, Tommy Dwyer, and Joey Dwyer.

Ingrid Kalinowski a/k/a Ingrid A. Sell, Alexandria, VA, self-represented,
defendant and appellee.

Sadie Bro, Bismarck, ND, self-represented, defendant and appellee.
                                  Dwyer v. Sell
                                  No. 20200188

Crothers, Justice.

[¶1] Tim Dwyer Jr. appeals from an amended judgment deciding his claims
against Margaret Sell and John Dwyer as co-trustees of the Tim Dwyer Farm
Trust. The co-trustees and Jane Dwyer Morgan and Barbara Dwyer Rice, as
beneficiaries of the Trust, cross-appeal from the amended judgment. The
district court concluded the co-trustees have broad discretion to sell Trust
property, any sale of Trust property must be under a contract for deed with no
option for prepayment and a reservation of a right to access Trust property for
hunting was prohibited. We affirm.

                                         I

[¶2] Tim Dwyer Sr. owned more than 7,000 acres of real property in
McKenzie County. In December 2004, Dwyer Sr. established the Tim Dwyer
Farm Trust and conveyed the property to the Trust. Dwyer Sr. named
Margaret Sell and John Dwyer as co-trustees of the Trust. Dwyer Sr.’s son,
Tim Dwyer Jr., had a continuing right to lease the farm and ranch land from
the Trust as long as the Trust owned the property. Dwyer Jr. also had a first
right to purchase Trust property if the co-trustees decided to sell the property.
Dwyer Sr. died in January 2005.

[¶3] In October 2018, the co-trustees believed a sale of Trust property was in
the beneficiaries’ best interests. The co-trustees informed Dwyer Jr. of their
decision and acknowledged his first right to purchase. After informing Dwyer
Jr. of their decision, issues arose over the co-trustees’ authority to sell Trust
property, the financing of a potential sale, and whether rights for hunting and
outdoor recreation could be reserved.

[¶4] Dwyer Jr. sued the co-trustees, seeking declaratory relief relating to
certain terms of the Trust agreement. The complaint requested the district
court to interpret the Trust agreement and settle the parties’ dispute. Dwyer
Jr. requested the court to declare: (1) the co-trustees are obligated to first offer
for sale all of the Trust property to Dwyer Jr., and he then has the right to

                                         1
purchase all or any part of the property; (2) the co-trustees cannot withdraw
Trust property from a possible sale to Dwyer Jr. after appraisals have been
completed; (3) a contract for deed for the sale of Trust property will not prohibit
prepayment of principal and interest; and (4) any sale of Trust property will
include a reserved right of access for Trust beneficiaries for purposes of
hunting, hiking and other outdoor recreational activity.

[¶5] Dwyer Jr. and the co-trustees moved for summary judgment. After a
hearing, the district court concluded the Trust agreement was unambiguous
and granted partial summary judgment in the co-trustees’ favor. The court
concluded the Trust agreement grants the co-trustees broad discretion to sell
none, some or all of the Trust property as they deem to be in the beneficiaries’
best interests. The court concluded the co-trustees may withdraw Trust
property from a proposed sale if the property appraisals are not satisfactory.
The court concluded Dwyer Jr. must purchase Trust property under a 15-year
contract for deed with annual principal payments, 4.5 percent interest and no
prepayment option. The court also concluded N.D.C.C. § 47-05-17 prohibits the
co-trustees from reserving a right to access Trust property for hunting.

                                        II

[¶6] This Court’s standard of review for summary judgments is well
established:

      “Summary judgment is a procedural device for the prompt
      resolution of a controversy on the merits without a trial if there
      are no genuine issues of material fact or inferences that can
      reasonably be drawn from undisputed facts, or if the only issues to
      be resolved are questions of law. A party moving for summary
      judgment has the burden of showing there are no genuine issues
      of material fact and the moving party is entitled to judgment as a
      matter of law. In determining whether summary judgment was
      appropriately granted, we must view the evidence in the light most
      favorable to the party opposing the motion, and that party will be
      given the benefit of all favorable inferences which can reasonably
      be drawn from the record. On appeal, this Court decides whether
      the information available to the district court precluded the
      existence of a genuine issue of material fact and entitled the

                                        2
      moving party to judgment as a matter of law. Whether the district
      court properly granted summary judgment is a question of law
      which we review de novo on the entire record.”

Krebsbach v. Trinity Hosps., Inc., 2020 ND 24, ¶ 7, 938 N.W.2d 133 (quoting
Pennington v. Cont’l Res., Inc., 2019 ND 228, ¶ 6, 932 N.W.2d 897).

                                      III

[¶7] Dwyer Jr. claims the district court erred in its interpretation of the Trust
agreement.

[¶8] This Court’s primary objective in construing a trust agreement is to
ascertain the settlor’s intent. Tr. of Roger S. Linn Restated Tr. Agreement, 2019
ND 58, ¶ 10, 923 N.W.2d 815. When a trust agreement is unambiguous, the
settlor’s intent is ascertained from the language of the agreement itself. 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.” Id.
Whether a trust agreement is ambiguous is a question of law, fully reviewable
on appeal. Id.

[¶9] General rules of interpretation of written instruments apply to the
construction of trust documents. Tr. of Roger S. Linn Restated Tr. Agreement,
2019 ND 58, ¶ 11. 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. If a contract is ambiguous, extrinsic evidence
may be considered to determine the parties’ intent, which becomes a question
of fact. Hallin v. Inland Oil & Gas Corp., 2017 ND 254, ¶ 9, 903 N.W.2d 61.

                                        A

[¶10] Dwyer Jr. contends the co-trustees have limited authority relating to the
sale of Trust property. He argues they must first offer him all of the property,
they do not have the discretion to choose which property to sell and they cannot
withdraw property from a potential sale after the property is appraised.

                                        3
[¶11] Article VII of the Trust agreement, relating to the sale of Trust property,
states in part:

      “I hereby authorize my Co-Trustees to purchase, sell or otherwise
      encumber the land, if in their sole discretion to do so, is necessary
      for the payment of debts or taxes and also, if the Co-Trustees
      believe to do so is in the best interest of the beneficiaries of this
      Trust.
             “My Co-Trustees are directed that in the event that this land
      is to be sold, TIM DWYER, JR., shall have the right to purchase
      all or any part of the land provided that the purchase price shall
      be determined upon the appraisal of two qualified appraisers as
      selected by the Co-Trustees and the proposed purchaser with the
      average of the two appraisals being the sale price. If TIM DWYER,
      JR., agrees to purchase the land, he shall do so on a Contract for
      Deed extending for a period of 15 years at an interest rate of 4½
      percent. The Contract for Deed entered for this property shall
      require equal annual installments of interest and [principal]. In
      the event that my son, Tim Dwyer, Jr., fails to exercise this first
      right to purchase, then any other child of mine shall have the right
      to purchase all or any part of the property based upon the same
      valuation.”

[¶12] The district court concluded:

      “[T]he co-trustees have been granted flexibility in their ability to
      buy and sell trust property for the sole benefit of the beneficiaries.
      The terms of the trust give Tim Jr. the same flexibility by allowing
      him to pick and choose which parcels, if any, to purchase when and
      if offered for sale. Therefore, the co-trustees are given broad
      discretion to sell none, some, or all of the land at a time [they] deem
      in the best interests of the beneficiaries.”

[¶13] We agree with the district court. The plain language of the Trust
agreement grants the co-trustees broad discretion to sell Trust property. They
may sell property to pay the Trust’s debts and taxes, or if they believe a sale is
in the beneficiaries’ best interests. See N.D.C.C. § 59-16-02(1) (stating “[a]
trustee shall administer the trust solely in the interests of the beneficiaries”).
The Trust agreement also provides “that in the event that this land is to be
sold, [Tim Dwyer Jr.] shall have the right to purchase all or any part of the

                                        4
land” at a purchase price determined by the average of two appraisals. This
phrase limits the co-trustees’ broad power to sell Trust property. If they decide
to sell Trust property, they must first offer the property to Dwyer Jr., who then
has authority to purchase all, some or none of the property offered for sale.
This phrase does not limit the co-trustees’ or Dwyer Jr.’s authority to withdraw
Trust property or decline to purchase Trust property if either party is
dissatisfied with the purchase price as determined by the appraisals. The court
did not err in concluding the co-trustees have broad discretion to sell Trust
property if they believe a sale is in the best interests of the beneficiaries.

                                       B

[¶14] Dwyer Jr. argues the Trust agreement does not prohibit prepayment of
a contract for deed for the purchase of Trust property.

[¶15] The Trust agreement states, “If [Tim Dwyer Jr.] agrees to purchase the
land, he shall do so on a Contract for Deed extending for a period of 15 years
at an interest rate of 4½ percent. The Contract for Deed entered for this
property shall require equal annual installments of interest and [principal].”

[¶16] The contract for deed terms expressed in the Trust agreement are
explicit and unambiguous. Under the Trust agreement, Dwyer Sr. specified
certain terms by which Trust property would be sold. He intended a sale of the
property to be financed by the Trust for fifteen years at an interest rate of 4.5
percent. Dwyer Jr. claims prepayment of the contract for deed is allowed
because the Trust agreement does not expressly prohibit prepayment.
Although the Trust agreement does not expressly prohibit prepayment, the
agreement plainly states the contract for deed “shall require equal annual
installments of interest and [principal].” The requirement of fifteen equal
annual installments of principal and interest implies if not directs that no
prepayment of the contract is permitted. See Goetz v. Hubbell, 266 N.W. 836,
840 (N.D. 1936) (“We do not make a contract for the parties. We declare what
the contract is.”). The district court did not err in concluding the Trust
agreement does not allow prepayment of the contract for deed for the sale of
Trust property.

                                       5
                                                 IV

[¶17] Dwyer Jr., the co-trustees and certain beneficiaries assert the district
court erred in concluding N.D.C.C. § 47-05-17 prohibits the reservation of the
right to access Trust property for hunting.

[¶18] Article IX of the Trust agreement, relating to hunting, hiking and
outdoor recreation on Trust property, provides in part:

       “[M]y Co-Trustees and any successor Co-Trustee as well as any
       person receiving a conveyance from this Trust shall reserve unto
       all of my descendants the right to have access to the subject
       property pursuant to guidelines established by the Co-Trustees of
       this Trust and the owner or tenant of the property for purposes of
       hunting, hiking and other outdoor recreational activity.”

[¶19] The district court concluded N.D.C.C. § 47-05-17 prohibited the
reservation of hunting rights on Trust property. When the court decided this
case, N.D.C.C. § 47-05-171 stated:

       “The right of access to land to shoot, shoot at, pursue, take, attempt
       to take, or kill any game animals or game birds; search for or
       attempt to locate or flush any game animals and game birds; lure,
       call, or attempt to attract game animals or game birds; hide for the
       purpose of taking or attempting to take game animals or game
       birds; and walk, crawl, or advance toward wildlife while possessing
       implements or equipment useful in the taking of game animals or
       game birds may not be severed from the surface estate. This
       section does not apply to deeds, instruments, or interests in
       property recorded before August 1, 2007.”

Because no documents relating to Trust property, including the Trust
agreement, were recorded before August 1, 2007, the court concluded N.D.C.C.
§ 47-05-17 prohibited the reservation of the right to access Trust property for

1 While this appeal was pending, the legislature amended N.D.C.C. § 47-05-17 by excluding from the
statute “deeds, instruments, or interests in property recorded or executed before August 1, 2007.” 2021
N.D. Sess. Laws ch. 333, § 1. Even with the amended language, our decision and analysis remains the
same.

                                                  6
hunting. The court also concluded “reservation of other outdoor activities is
permitted and must be reserved by the co-trustees when making any
conveyance.”

[¶20] In Hauer v. Zerr, 2020 ND 16, ¶ 2, 937 N.W.2d 508, we construed a 2013
deed with a reservation clause stating, “The Grantor reserves the right to hunt
on any or all the premises with the privilege of ingress and egress thereto.” We
concluded “the reservation [was] a severance of hunting rights prohibited by
N.D.C.C. § 47-05-17.” Id. at ¶ 7.

[¶21] Here, the Trust agreement directs the co-trustees to “reserve . . . the right
to have access to [Trust] property . . . for purposes of hunting.” Section 47-05-
17, N.D.C.C., states “[t]he right of access to land to [hunt] game animals or
game birds may not be severed from the surface estate,” unless the deed or
other instrument severing a right of access for hunting was recorded before
August 1, 2007.

[¶22] Regardless of whether the Trust agreement was recorded, N.D.C.C. § 47-
05-17 prohibits the co-trustees from reserving a right to access Trust property
for hunting under Article IX because the Trust agreement is not a severance
or conveyance from the Trust. Article IX instructs the co-trustees to reserve a
right of access to Trust property for hunting if Trust property is conveyed.
Unlike Hauer, which involved a deed and a transfer of property, no title to
Trust property has been transferred from the Trust. See N.D.C.C. § 47-09-01
(defining “transfer” as “an act of the parties or of the law by which the title to
property is conveyed from one living person to another”). When Dwyer Sr.
transferred his real property to the Trust in December 2004, he did not reserve
unto his descendants a right of access to the property for hunting. Because the
Trust agreement only instructs the co-trustees on how to handle future
conveyances of Trust property, any conveyance of Trust property and
contemporaneous reservation of hunting rights will occur after August 1, 2007,
and would be prohibited by N.D.C.C. § 47-05-17 or governed by the statute in
effect at the time the conveyance is made.

                                        7
[¶23] The district court correctly concluded a conveyance of Trust property
reserving a right to access the property for hunting was prohibited by N.D.C.C.
§ 47-05-17.

                                      V

[¶24] We have considered the parties’ remaining arguments and conclude they
are either without merit or unnecessary to our decision. The amended
judgment is affirmed.

[¶25] Jon J. Jensen, C.J.
      Gerald W. VandeWalle
      Daniel J. Crothers
      Lisa Fair McEvers
      Jerod E. Tufte

                                      8