Zabolotny v. Fedorenko

Citations: 315 N.W.2d 668; 1982 N.D. LEXIS 225Docket: Civ. No. 10067

Court: North Dakota Supreme Court; February 10, 1982; North Dakota; State Supreme Court

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Anton Zabolotny and Bernel Zabolotny initiated a legal action against Steve Fedorenko and others regarding a quit claim deed dated November 22, 1948. The District Court of Billings County reformed the deed to include the Southeast Quarter of a specific section of farmland in North Dakota, which the defendants (Fedorenko heirs) contested on appeal. They raised two primary issues: whether the district court's finding of mutual mistake in the deed was clearly erroneous and whether the finding that Anton Zabolotny provided consideration for the conveyance, allowing for reformation, was also clearly erroneous.

The background involves Katie Zabolotny Fedorenko, who inherited a one-third interest in 360 acres of farmland from her deceased husband Alex. After her death in 1948, her estate included an undivided interest in the property, which Stephen Fedorenko, her second husband, conveyed through the quit claim deed. This deed, however, did not include the Southeast Quarter, which prompted Anton to seek a reformation after discovering the omission following Stephen's death. The attorney for Katie's estate had indicated that Stephen could either deed the land to the children or specifically to Anton, which he chose to do. Anton's filing for reformation aimed to rectify the absence of the Southeast Quarter in the deed.

A trial without a jury took place on January 30, 1981, where the district court determined that the parties intended to include the Southeast Quarter in a quit claim deed but it was mistakenly excluded due to clerical error. The court found that both Steve Fedorenko and Anton Zabolotny had a mutual understanding to convey all of Steve's interest in the property to Anton at the time the deed was executed. The court ordered the quit claim deed to be reformed to include the Southeast Quarter, prompting an appeal from the Fedorenko heirs who argued that the court wrongly identified a mutual mistake.

Evidence supporting the court’s finding included: (1) correspondence from the attorney indicating Steve intended to convey the entire share to Anton; (2) Steve's will which did not reference any interest in the Southeast Quarter; (3) testimony from Elizabeth Fedorenko affirming Steve's intention to convey all of Katie's property to her children; (4) Anton's testimony confirming that Steve never claimed rights or sought any benefits from the Southeast Quarter; and (5) an agreement following Katie's death where Steve agreed to transfer his share of the farmland to Anton without compensation, while retaining Katie's personal property.

Stephen and Katie, upon their marriage, established an agreement that neither would inherit the other's property, designating that their respective properties would instead pass to their children from prior marriages. Elizabeth Fedorenko testified regarding this agreement, confirming that both parties intended to ensure their properties would go to their children. In legal contexts, a court can reform a written instrument due to mutual mistake if justice requires it, but the burden of proof lies with the party seeking reformation. They must present clear, specific, and convincing evidence of such a mistake. The court's review of mutual mistake cases is fact-specific, considering surrounding circumstances to uncover the parties' intentions. In this case, the district court found sufficient evidence of mutual mistake regarding a quit claim deed that omitted a property description. The Fedorenko heirs contended that the court erred in concluding that consideration was given for the conveyance, but the court determined that this was irrelevant to the reformation issue. Generally, equity does not reform a voluntary deed without consideration, as the grantee typically has no claim against the grantor for mistakes in such transactions. Therefore, a volunteer must accept a gift as it is, without expectation of rectification.

A split of authority exists regarding the applicability of the rule against reformation of a voluntary conveyance in actions initiated by a grantee against the grantor's heirs. Some jurisdictions maintain that reformation is not permissible in favor of the grantee against the heirs, while others allow for reformation if it can be shown that the grantor would not have objected. The latter approach is favored in this case, aligning with the equitable principle that seeks to fulfill the intended outcome of the parties involved. In the cited case, there was no evidence that the grantor, Stephen, would have objected to the reformation of the quit claim deed, and substantial evidence indicated his intent to convey his entire inherited share of property to Anton. Therefore, the court found it unnecessary to assess whether consideration was given for the conveyance. The district court's decision to reform the quit claim deed to include the Southeast Quarter was affirmed.