Knorr v. Norberg
2014 ND 74
| N.D. | 2014Background
- Robert and Cheri Knorr transferred their Lake Audubon home to their daughter Alonna and son-in-law Jon Norberg during financial distress; the Knorrs continued to occupy and pay all expenses after the transfer.
- The Knorrs say the transfer was a lease with an option to repurchase; Jon denies any option existed and contends the agreement is oral and barred by the statute of frauds.
- A written lease containing an option was prepared in February 2011, signed by Alonna but a signed copy by Jon was not produced.
- The Knorrs paid mortgage payments, taxes, insurance, utilities, maintained the property, and later gave notice they were exercising the option to repurchase; Jon refused to recognize the option.
- The district court found an oral option existed and that part performance removed the contract from the statute of frauds, ordering specific performance; it did not rule on promissory estoppel or constructive trust claims.
- The Supreme Court reviewed whether part performance can remove the alleged oral option from the statute of frauds and remanded for consideration of equitable theories.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether part performance removed an oral lease-with-option from the statute of frauds | Knorrs: their continued possession, payments of mortgage/taxes/insurance/utilities, improvements, and notice exercising the option constitute part performance consistent only with an option to repurchase | Norberg: conduct is consistent with a simple oral lease; no signed writing and part performance does not uniquely point to an option | Reversed district court: part performance did not establish acts "consistent only with" an option; statute of frauds bars the oral option |
| Whether court made adequate findings of the terms of the alleged oral contract | Knorrs: terms were proved by conduct and testimony | Norberg: essential terms (lease length, payment amount, option exercise method) were not established | Court faulted for failing to identify essential terms of the oral agreement |
| Whether an attempted exercise of an option alone suffices as part performance | Knorrs: their attempt to exercise the option supports enforcement | Norberg: attempted exercise cannot substitute for the required unique acts of part performance | Attempt to exercise an alleged option is insufficient by itself to remove the agreement from the statute of frauds |
| Whether equitable remedies should be considered | Knorrs: alternatively entitled to relief via promissory estoppel or constructive trust | Norberg: statute of frauds bars the contract; factual disputes exist on equitable claims | Court remanded for district court to consider promissory estoppel and constructive trust based on disputed facts |
Key Cases Cited
- Moen v. Thomas, 627 N.W.2d 146 (N.D. 2001) (long-term lease with option ordinarily requires a signed writing under statute of frauds)
- Bloomquist v. Goose River Bank, 836 N.W.2d 450 (N.D. 2013) (part performance must "unmistakably point to" the alleged oral agreement; acts must be consistent only with that agreement)
- Rickert v. Dakota Sanitation Plus, Inc., 812 N.W.2d 413 (N.D. 2012) (clarifies standard for part performance to remove statute of frauds)
- Fladeland v. Gudbranson, 681 N.W.2d 431 (N.D. 2004) (payments and improvements may be consistent with a lease without option; not enough if acts are explainable by other relationships)
- Alfson v. Anderson, 78 N.W.2d 693 (N.D. 1956) (tender is a necessary precedent to maintain an action for specific performance to convey or lease real estate)