Markgraf v. Welker
2017 ND 219
| N.D. | 2017Background
- In 1965 W.J. Hannah conveyed land by grant deed to “Arnold Hannah, Trustee.” Plaintiffs Markgraf and Shanahan are descendants of W.J.’s children and claim the conveyance created an implied (resulting) trust for the family’s benefit.
- Plaintiffs allege Arnold acted as trustee: executing leases as “Trustee,” reserving minerals in later deeds, keeping accounting records, disbursing proceeds to siblings, and paying himself fees.
- Defendants Welker and Ostrem are heirs of Arnold and claim the deed conveyed title to Arnold individually (the word “Trustee” is surplusage under N.D.C.C. § 47‑09‑12), so they own the minerals outright.
- The district court initially granted summary judgment to plaintiffs; this Court remanded for trial because material factual disputes existed.
- After a bench trial on stipulated facts, the district court found by clear and convincing evidence a resulting trust was created, the trust was not repudiated, and the statute of limitations did not bar the claim. The Supreme Court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a resulting trust was created when the 1965 deed named “Arnold Hannah, Trustee” | Deed plus subsequent conduct (leases, accounting, distributions) show intent to create a family trust for mineral interests | The word “Trustee” is surplusage under §47‑09‑12; deed conveyed title to Arnold individually | Court: Resulting trust exists—deed label plus contemporaneous and later conduct support intent to create a trust |
| Whether evidence met the clear-and-convincing standard for an implied trust | Evidence of intent and trustee-like conduct satisfies clear-and-convincing proof | Evidence is conflicting; plaintiffs failed to prove intent by clear and convincing evidence | Court: Clear-and-convincing evidence supported a resulting trust; findings not clearly erroneous |
| Whether Arnold repudiated the trust (triggering the statute of limitations) by his 1989 letter | Plaintiffs: No repudiation; Arnold continued to act consistent with the trust and distributed proceeds afterwards | Defendants: 1989 letter shows Arnold (and siblings) agreed he would keep minerals for estate-settlement services—constitutes repudiation and starts limitations period | Court: 1989 letter did not show an open, continuing denial of the trust to all beneficiaries; no repudiation proved; statute of limitations did not bar claim |
| Whether conflicting evidence required reversing the bench-trial findings | Plaintiffs: N/A (they prevailed) | Defendants: Conflicting evidence and inferences require reversal | Court: Choice between permissible views of evidence is not clearly erroneous; affirmed |
Key Cases Cited
- Markgraf v. Welker, 873 N.W.2d 26 (N.D. 2015) (standards for implied trusts and prior appellate disposition in this matter)
- Zundel v. Zundel, 278 N.W.2d 123 (N.D. 1979) (clear-and-convincing proof and repudiation principles for implied trusts)
- Border Res., LLC v. Irish Oil & Gas, Inc., 869 N.W.2d 758 (N.D. 2015) (appellate review standard for bench findings)
- Hodny v. Hoyt, 243 N.W.2d 350 (N.D. 1976) (repudiation must be open denial to start limitations period)
- Erickson v. Olsen, 844 N.W.2d 585 (N.D. 2014) (weight-of-evidence deference to trial court findings)