Four Season's Healthcare Center, Inc. v. Linderkamp
2013 ND 159
| N.D. | 2013Background
- Earl and Ruth Linderkamp owned and farmed a quarter section; their son Elden farmed it and claimed an oral 1977 agreement with Earl that Elden would be reimbursed for improvements when the land was sold.
- In August 2006 Earl and Ruth executed a contract for deed conveying the land to Elden and Rita for a stated $50,000; in November 2006 they executed a warranty deed reciting $50,000 as "full consideration."
- Shortly after, the parents entered Four Season’s nursing home; their long‑term care bills thereafter remained unpaid and the parents later died (Ruth 2009, Earl 2010).
- Four Season’s sued to set aside the transfer as a fraudulent conveyance and to recover unpaid nursing home charges; the estates sued to rescind the conveyance for lack of capacity.
- After a bench trial the district court: found the conveyance was a void fraudulent transfer (insufficient consideration and impending insolvency), voided the deeds, authorized probate administration of the land, awarded Four Season’s recovery against Elden, and allowed Elden/Rita a net $45,000 claim against the estates.
- The Supreme Court affirmed the fraudulent transfer finding and rescission but reversed the portion of the judgment imposing sole personal liability on Elden for the nursing‑home bill without resolving potential liability of the other children under N.D.C.C. § 14‑09‑10, and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was the conveyance a fraudulent transfer under N.D.C.C. § 13‑02.1‑04(1) (lack of reasonably equivalent value and impending insolvency)? | Four Season’s / estates: parents did not receive reasonably equivalent value; they were about to incur nursing‑home debts beyond ability to pay. | Elden/Rita: parents had sufficient resources; Elden provided $120–$130K in improvements as part of consideration. | Court: Affirmed fraudulent transfer — parents lacked reasonably equivalent value and were about to incur debts beyond ability to pay. |
| Could Elden prove an antecedent oral agreement/consideration (statute of frauds / parol evidence)? | Elden: prior oral agreement and improvements constituted additional consideration; deeds’ $50K did not reflect true consideration. | Four Season’s/estates: parol evidence/statute of frauds bar altering deed; no credible proof of oral agreement or large improvements. | Court: Parol evidence rule does not automatically bar proof of true consideration, but the district court properly admitted evidence and found Elden’s proof not credible; holdings on credibility upheld. |
| Did Elden actually make >$100,000 of improvements that would satisfy antecedent debt/value? | Elden: testified to $120–$130K of improvements. | Siblings/Four Season’s: disputed; testimony and records did not support that sum. | Court: District court’s adverse credibility finding was not clearly erroneous; no credible evidence of >$100K in improvements. |
| Personal liability of children under N.D.C.C. § 14‑09‑10 for parents’ nursing‑home debt — was Elden properly held solely liable? | Four Season’s: Elden should be liable (district court entered partial summary judgment earlier). | Elden/Rita: argued other children might share liability; district court prematurely made Elden solely liable. | Court: Reversed insofar as the judgment imposed sole personal liability on Elden without resolving other children’s potential liability; remanded for further proceedings on § 14‑09‑10. |
Key Cases Cited
- Baldus v. Mattern, 93 N.W.2d 144 (N.D. 1958) (statute of frauds does not apply where contract for deed is executed and delivered)
- Zimmer v. Bellon, 153 N.W.2d 757 (N.D. 1967) (deed merges prior agreements; parol evidence barred except for fraud, mistake, or true consideration issues)
- Gajewski v. Bratcher, 221 N.W.2d 614 (N.D. 1974) (statutory parol evidence rule discussion)
- Erickson v. Wiper, 157 N.W. 592 (N.D. 1916) (parol admissible to show actual consideration differs from that recited in deed)
- Johnson Farms v. McEnroe, 568 N.W.2d 920 (N.D. 1997) (parol evidence can be used to show true consideration)
- Trinity Med. Ctr., Inc. v. Rubbelke, 389 N.W.2d 805 (N.D. 1986) (children’s secondary liability for necessaries furnished to parents under § 14‑09‑10)