In the June 2020 case of Nelson v. Nelson, the North Dakota Supreme Court issued a stark reminder that failure to seek a stay of a partition judgment renders an appeal moot once the property is sold.
The Facts of Nelson v. Nelson
In 2011, Elsie executed estate planning documents and a quitclaim deed conveying a remainder interest in a Bismarck condominium to her children, Steven, Gail, and William. Elsie died in 2014.
In 2016, Steven and Gail sued William for partition of the condominium. William counterclaimed and alleged that the 2011 quitclaim deed was invalid on the grounds of undue influence and lack of capacity.
After an initial appeal resulted in the reversal of summary judgment against William, trial occurred in 2019. The North Dakota district court entered a judgment concluding that the quitclaim deed was valid because Elsie did not lack capacity to execute the deed and was not unduly influenced.
Steven and Gail were awarded attorney’s fees and costs. Steven was granted authority to sell the condominium. William’s discovery claims and his motion to stay the proceedings to reopen Else’s probate were denied.
William raised twenty-one issues on appeal. Five of the issues related to the sale of the condominium, as follows:
(1) Steven Nelson’s exclusive authority to sell the condominium;
(2) Steven Nelson’s authority to perform maintenance and pay expenses related to the property;
(3) whether the district court should have supervised the sale;
(4) the failure to provide the property owners a bona fide right of first refusal; and
(5) whether the court should have compelled discovery about a failed sale of the property in January 2018.
The Nelsons moved to dismiss portions of the appeal, claiming that the issues about the sale of the condominium were moot because the property was sold in April 2020.
What Is Partition Under North Dakota Law?
Often when someone dies their real property is inherited by multiple people, who become joint owners of the property. It is not uncommon that the beneficiaries of the real property do not want to own real property together. The solution is a partition action.
North Dakota statute, section 32-16-01 provides:
When several cotenants hold and are in possession of real or personal property as partners, joint tenants, or tenants in common, in which one or more of them have an estate or inheritance, or for life or lives, or for years, an action may be brought by one or more of such persons for a partition thereof according to the respective rights of the persons interested therein and for a sale of such property or a part thereof, if it appears that a partition cannot be made without great prejudice to the owners. Real and personal property may be partitioned in the same action.
Partition is generally a matter of right if one of the joint owners wants to partition and sell the real property.
Here, Steven and Gail wanted to partition and sell the property, while William challenged the validity of the quitclaim deed that made them joint owners. Steven and Gail won, and Steven was given the authority to sell the property, prompting, in part, this appeal.
When Is An Issue On Appeal Moot Under North Dakota Law?
The North Dakota Supreme Court cited precedent explaining the dismissal of an appeal as moot, stating:
Courts will not issue advisory opinions and will dismiss an appeal as moot if the issues become academic and there is no actual controversy left to be determined. No actual controversy exists if subsequent events make it impossible for a court to provide effective relief, or if the lapse of time has made the issue moot. Courts will determine a moot issue rather than dismiss an appeal, however, if the controversy is one of great public interest and involves the authority and power of public officials, or if the matter is capable of repetition, yet evading review.
Here, William did not attempt to obtain a stay of the judgment ordering the sale of the condominium and granting Steven the ability to handle the sale.
N.D.R.Civ.P. 62 provides that: “[i]f the judgment directs the sale . . . of real property, its execution is not stayed on appeal unless an undertaking is executed on behalf of the appellant by at least two sureties, for a sum as directed by the court.”
The North Dakota Supreme Court referred to earlier decisions which recognized the failure to obtain a stay may moot issues raised on appeal, and that “”[o]ther courts have recognized the failure to obtain a stay pending appeal of a court . . . ordered conveyance of property to third persons not interested in the action moots issues raised on appeal about the conveyance.”
The takeaway from this case is simple: if you want to challenge any aspect of a partition judgment in North Dakota, make sure you seek and obtain a stay of the judgment.