Schmidt v. Wittinger
2004 ND 189, 2004 N.D. LEXIS 317, 687 N.W.2d 479 (2004)
Rule of Law:
A partition sale of co-owned property is permissible when a partition in kind (physical division) would cause "great prejudice" to the owners by materially diminishing the value of their individual shares compared to a sale of the whole. However, a cotenant is not obligated to participate in voluntary federal farm programs, and thus, other cotenants cannot recover compensatory damages for lost program payments due to a co-owner's non-participation.
Facts:
- Donald, Kenneth, and Alfred Wittinger are brothers who inherited undivided equal interests in farmland in Dunn County from their parents.
- Alfred Wittinger did not pay his proportionate share of the farmland expenses and taxes.
- Alfred Wittinger refused to sign documents required for the parties to receive federal farm program payments, specifically Conservation Reserve Program (CRP) payments.
- The farmland contains a meandering river, existing fences that would necessitate significant new construction for division, and not all tracts have road access or water supply.
- A house on the premises appears to be on a section line between Sections 5 and 8, making it difficult to partition.
- Dividing the property into smaller tracts would make farming less efficient with modern machinery, potentially diminishing the per-acre value.
- Alfred Wittinger demonstrated hostility and an unwillingness to discuss or communicate with his brothers regarding property matters.
Procedural Posture:
- Donald and Kenneth Wittinger and Kevin Schmidt sued Alfred Wittinger in the district court (trial court) of Dunn County.
- The plaintiffs sought specific performance of a purchase option under a lease held by Schmidt or, alternatively, a partition sale of the inherited farmland.
- Donald and Kenneth Wittinger also sought compensatory damages from Alfred Wittinger for his failure to pay his share of property expenses/taxes and his refusal to sign federal farm program documents.
- Alfred Wittinger filed an answer objecting to specific performance and a counterclaim for damages.
- The specific performance claim was subsequently withdrawn by the plaintiffs.
- At the bench trial, Alfred Wittinger did not appear or have legal representation.
- The district court ordered a partition sale of the property, awarded compensatory damages to Donald and Kenneth Wittinger (including for lost federal program payments), and dismissed Alfred Wittinger's counterclaim.
- Alfred Wittinger appealed the district court's judgment to the Supreme Court of North Dakota.
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Issue:
Does a trial court err in ordering a partition sale rather than a partition in kind when there is evidence that physical division would result in "great prejudice" to the owners, and are cotenants entitled to compensatory damages for another cotenant's refusal to sign documents necessary for voluntary federal farm program payments?
Opinions:
Majority - Sandstrom, Justice
No, the trial court did not err in ordering a partition sale because its finding that a partition in kind could not be made without great prejudice to the owners was not clearly erroneous. However, yes, the trial court erred in awarding compensatory damages for lost federal farm program payments, as there was no legal basis for such a claim. The law favors partition in kind, but N.D.C.C. § 32-16-12 permits a partition sale if it appears that partition cannot be made without "great prejudice" to the owners. Great prejudice exists when the value of each owner's share from a physical partition would be materially less than their share of the money from a sale of the whole property. The burden of proving great prejudice rests on the party demanding a sale. The trial court's numerous factual findings—including difficulties with fencing, lack of road access for some parcels, unequal water supply, diminished efficiency of smaller tracts, and the inability to divide the house—supported the conclusion that a partition in kind would result in great prejudice and diminished value. These findings were not clearly erroneous, especially as Alfred Wittinger failed to appear or present evidence to refute them. Regarding damages, cotenants are liable to account for receiving more than a proportionate share of rents and profits and have a duty to pay their share of expenses and taxes. Therefore, the award of damages to Donald and Kenneth Wittinger for Alfred's unpaid expenses and taxes was affirmed. However, Donald and Kenneth Wittinger failed to advance a legal theory demonstrating that Alfred Wittinger had a duty to participate in the voluntary federal CRP program or that his failure to do so constituted a legal breach. Without such a duty, there is no basis for compensatory damages for alleged "loss" of CRP payments, and that part of the award was reversed.
Analysis:
This case clarifies the standard for ordering a partition sale over a partition in kind, emphasizing that the party seeking a sale must present specific, detailed evidence of "great prejudice," particularly concerning the practical difficulties and economic disadvantage of physical division. It underscores that while cotenants have financial duties regarding shared property expenses and profits, these obligations do not extend to compelling participation in voluntary federal programs. This decision provides guidance on the scope of damages recoverable in cotenancy disputes, limiting claims to legally recognized duties and preventing recovery for missed opportunities from voluntary programs.
