Johnson v. Mark
2013 ND 128
| N.D. | 2013Background
- Jeanne Johnson kept a handwritten ledger documenting payments and loans involving her son Steven for two quarter sections of farmland; Steven claimed a 1992 contract for deed for the second quarter.
- Steven sued the estate and family members after Jeanne’s 2010 death seeking specific performance and delivery of a personal representative’s deed, asserting the ledger constituted a contract for deed with a $114,000 purchase price and final payment due in 2003.
- Defendants denied a contract for deed, characterized Steven’s post-2003 payments as rent, and sought discovery including Steven’s federal and state tax returns.
- The district court compelled production of tax returns, ruled (pre-trial) a valid contract for deed existed under the statute of frauds but left factual payment issues for trial, and later found Steven failed to pay taxes and the balance by 2003.
- After trial the court found abandonment/relinquishment of any equitable interest, treated post-2003 payments as rent, canceled the contract for deed without granting redemption, and dismissed the specific performance claim.
- Steven appealed the discovery order and the cancellation/dismissal; the Supreme Court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether tax returns are privileged and exempt from discovery | Johnson: federal/state tax returns are confidential/privileged | Mark: tax returns are discoverable and relevant to whether payments were rent or contract payments | Court: Tax returns are not privileged; discovery within court discretion and properly compelled |
| Whether a contract for deed existed (statute of frauds) | Johnson: ledger entries create an enforceable contract for deed as matter of law | Defendants: ledger insufficient under statute of frauds | Court: assumed for argument a valid contract existed; decision below upheld on other grounds (no reversible error) |
| Whether purchaser abandoned/relinquished equitable interest | Johnson: did not abandon; continuous possession and payments show performance or intent to perform | Defendants: failure to pay taxes and full balance by 2003, post-2003 conduct shows intent to treat occupancy as tenancy | Court: factual findings support abandonment; not clearly erroneous; abandonment extinguished equitable interest |
| Whether cancellation without redemption was proper | Johnson: cancellation required redemption period; equities favor specific performance | Defendants: equitable cancellation appropriate given long delay, unpaid taxes and that payments post-2003 were rent | Court: cancellation by court equity is permitted without statutory redemption period; refusal to grant redemption not an abuse of discretion |
Key Cases Cited
- Schriock v. Schriock, 128 N.W.2d 852 (N.D. 1964) (tax returns are not privileged communications and are discoverable)
- Bendish v. Castillo, 812 N.W.2d 398 (N.D. 2012) (distinguishing statutory cancellation and equitable cancellation/remedies for contracts for deed)
- Engen v. Kincannon, 79 N.W.2d 160 (N.D. 1956) (equitable interest under a contract for deed may be lost by abandonment)
- Asplund v. Danielson, 217 N.W. 848 (N.D. 1928) (time specified in contract can make time of essence)
- WFND, LLC v. Fargo Marc, LLC, 730 N.W.2d 841 (N.D. 2007) (parol evidence may be admissible to show annulment or modification of a land-sale contract after abandonment)