921 N.W.2d 431
N.D.2019Background
- In 1959 L.M. and C.S. Eckmann entered a contract for deed conveying property to William and Ethel Stauffer that expressly reserved oil, gas, and other mineral rights; the contract contemplated a five‑year payment plan and a later warranty deed.
- One month after the contract for deed, the Eckmanns executed and recorded a 1959 warranty deed conveying the property to the Stauffers that referenced the contract for deed but did not contain the mineral reservation.
- Over the ensuing decades the Stauffers, the Eckmanns, and successors executed numerous transfers, leases, title opinions, and other transactions involving the surface and mineral interests; Western acquired mineral deeds in 1989–1990 and filed this quiet title action in 2016 seeking reformation/quiet title to the minerals.
- The parties submitted stipulated facts; Western’s requested relief was effectively reformation of the 1959 warranty deed to reflect the mineral reservation in the contract for deed.
- The district court found Western’s reformation claim barred by the ten‑year statute of limitations (N.D.C.C. § 28‑01‑15(2)) and by laches, and also found Western failed to prove mutual mistake; it quieted title to the minerals in the Stauffers.
- The Supreme Court affirmed, holding the reformation claim accrued when the discrepancy was or should have been discovered and that Western (and predecessors) were on constructive notice from recorded instruments and title transactions, so the ten‑year statute of limitations had run.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Western’s reformation claim is barred by the ten‑year statute of limitations (N.D.C.C. § 28‑01‑15(2)) | The statute didn't begin to run because the district court made no finding on when the discrepancy was discovered | The discrepancy between the contract for deed and the recorded warranty deed was or should have been discovered with reasonable diligence long before 2016; constructive notice charged Western | Held: Claim time‑barred under § 28‑01‑15(2); accrual when mistake was or should have been discovered; limitations had run (affirmed) |
| Whether reformation is available for mutual mistake and whether laches blocks relief | Western asserted reformation based on mutual mistake (warranty deed should have reserved minerals) | Defendants argued Western failed to prove mutual mistake and laches bars relief given the long delay and intervening transactions | Held: Court found no proven mutual mistake and laches applicable; because § 28‑01‑15(2) bars the action the Court did not further address other issues, and judgment for defendants affirmed |
Key Cases Cited
- Wehner v. Schroeder, 335 N.W.2d 563 (N.D. 1983) (reformation may be allowed where record shows parties had no reason to review title and mistake not discovered)
- Diocese of Bismarck Trust v. Ramada, Inc., 553 N.W.2d 760 (N.D. 1996) (reformation based on mutual mistake accrues when mistake is or should be discovered)
- Northern Oil & Gas, Inc. v. Creighton, 830 N.W.2d 556 (N.D. 2013) (constructive notice: recorded information sufficient to alert a person to investigate title)
- Sickler v. Pope, 326 N.W.2d 86 (N.D. 1982) (purchasers are charged with notice of properly recorded instruments affecting title)