State v. Kusy
2013 ND 23
| N.D. | 2013Background
- In 1991, the Bakkens sold two parcels (A in Benson Co. and B in Pierce Co.) to the Duchschers under an earnest money contract granting the Seller an option to repurchase at $135 per acre and giving the Duchschers a first right of refusal on unsold land.
- Warranty deeds for parcels A and B recorded in late 1991 also contained an option to repurchase at $135 per acre, with no termination date specified.
- In 1992, the parties entered a separate written agreement concerning parcel B that limited the option period to ten years and required notice to potential buyers of the Bakkens’ option; the agreement was later corrected for scrivener’s errors but did not terminate the option.
- Paul Bakken died in 1994; in 2008 the Duchschers transferred parcel B to John Duchscher, Jr., and Ann Duchscher, after which the Bakkens notified they were in position to exercise the option.
- The Bakkens filed suit seeking a declaration that their option to repurchase parcel B still exists; the district court concluded the ten-year period terminated the option and that laches barred further exercise.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the 1992 agreement terminate the Bakkens’ option after ten years? | Bakken: option continued despite ten-year clause. | Duchschers: option terminated after ten years. | No; option to repurchase did not terminate. |
| Whether laches barred exercise of the option to repurchase parcel B | Bakken: laches does not apply; notice and recorded deeds preserve option. | Duchschers: laches applies due to delay. | Laches does not bar the Bakkens’ option. |
Key Cases Cited
- Schwarz v. Gierke, 2010 ND 166 (ND Supreme Court 2010) (contract interpretation; effects of ambiguous terms; independent review)
- Bendish v. Castillo, 2012 ND 30 (ND Supreme Court 2012) (contract interpretation; whole-document approach)
- Moen v. Meidinger, 547 N.W.2d 544 (ND 1996) (contract interpretation principles)
- U.S. Bank, Nat’l Ass’n v. Koenig, 2002 ND 137 (ND Supreme Court 2002) (contract interpretation; extrinsic evidence limits)
- National Bank of Harvey v. International Harvester Co., 421 N.W.2d 799 (ND Supreme Court 1988) (base contract interpretation standards)
- Habeck v. MacDonald, 520 N.W.2d 808 (ND Supreme Court 1994) (ambiguity and extrinsic evidence limits)
- Continental Cas. Co. v. Kinsey, 499 N.W.2d 574 (ND Supreme Court 1993) (ambiguity and construction of contracts)
- Wheeler v. Southport Seven Planned Unit Dev., 2012 ND 201 (ND Supreme Court 2012) (notice and recording implications for deeds)
- Sall v. Sall, 2011 ND 202 (ND Supreme Court 2011) (laches; prejudice and delay in enforcing rights)
- Diocese of Bismarck Trust v. Ramada, Inc., 553 N.W.2d 760 (ND Supreme Court 1996) (laches; factual defense analysis)
- Knudson v. Kyllo, 2012 ND 155 (ND Supreme Court 2012) (review of superior court factual findings; clear error standard)
- Myaer v. Nodak Mut. Ins. Co., 2012 ND 21 (ND Supreme Court 2012) (contract ambiguity; extrinsic evidence limits)