Johnson v. Hovland, 795 N.W.2d 294

Background

In 1976, Mathilda Olson conveyed a 50% mineral interest in Mountrail County to Bertha Hovland; a 1976 re-recorded deed added language granting Bertha a life estate with remainder to the Liebls, but the re-recorded deed was not properly executed or acknowledged.
Bertha Hovland died in 1978; Lambert Hovland died in 1983; neither Bertha’s nor Lambert’s estates probated the mineral interest at issue.
Liebls consistently claimed 50% of the mineral rights through various instruments from 1978 to 2007, including ratifications, stipulations, leases, and a paid-up lease with Contex Energy (EOG’s predecessor).
In 2008, Liebls sued to quiet title to the mineral rights; Ritter, Laber & Associates answered seeking affirmation of its interest via leases from Hovland heirs and devisees.
The district court held the 1976 re-recorded deed invalid and concluded reformation of the initial 1976 deed was barred by the statute of limitations; it quieted title with Liebls receiving a 1/4 interest and Hovlands a 1/4 interest in the minerals, with the remaining interests allocated to others.
Liebls sought to amend to plead reformation of the original 1976 deed; the court denied the motion as futile or time-barred, and summary judgment favored the Hovlands.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the district court abused its discretion in denying amendment to plead reformation	Liebls claim amended reformation is viable based on mutual mistake and original intent.	Hovlands contend amendment would be futile or time-barred and the reformation cannot be supported.	Denied; court affirmed denial, noting futility differently but no abuse of discretion.
Whether the re-recorded 1976 deed is valid and whether reformation of the original deed is permissible	Re-recorded deed reflects Bertha’s life estate and Liebls’ remainder; reforming the first deed could reflect true intent.	Re-recorded deed is a nullity; correction/reformation of the first deed is improper or time-barred.	Re-recorded deed invalid; reformation of the first deed not established; the amendment to pursue reformation was futile.
Whether Liebls’ reformation claim accrued and was time-barred	Liebls could not have discovered the error until May 2007 and thus the claim was timely.	Accrued when the 1976 re-recording occurred, or earlier, making the action time-barred.	Court limiting analysis found the reformation claim not proven on the record, and whether barred by limitations was not decisive to the outcome.
Whether Liebls provided substantial evidence to support reformation	Schulte affidavit and surrounding documents show mutual intent to create a life estate for Bertha with remainder to Liebls.	Affidavit is insufficient to prove mutual intent; lacks Bertha’s participation and clear, convincing evidence.	Liebls failed to provide substantial (clear and convincing) evidence; amendment properly denied.

Key Cases Cited

Spitzer v. Bartelson, 2009 ND 179 (ND) (reformation requires clear and convincing evidence)
Ell v. Ell, 295 N.W.2d 143 (ND 1980) (equitable reform of a contract after mutual mistake)
Heart River Partners v. Goetzfried, 2005 ND 149 (ND) (parol evidence admissible in reformation; consideration of extrinsic evidence)
City of Fargo v. D.T.L. Properties, Inc., 564 N.W.2d 274 (ND 1997) (extrinsic evidence admissible in contract interpretation)
Wehner v. Schroeder, 335 N.W.2d 563 (ND 1983) (accrual for statute of limitations and discovery rules)
Dahl v. Messmer, 2006 ND 166 (ND) (burden to present substantial evidence in summary-judgment context)