## Facts

- Robert and Joan Schnell married in 1955 and began operating a ranching partnership with Robert’s father in Adams County, North Dakota.
- In 1964, Robert and Joan purchased the ranch from Robert’s father at a price near market value.
- The parties divorced in 1974.
- In 1976, a court ordered the ranch’s real and personal property placed in a trust.
- The trust terminated in late 1979, after which the parties held the ranch real estate as tenants in common and continued operating the ranch together until December 1981.
- The ranch consisted of roughly 4,420 acres plus about 1,600 leased contiguous acres, with substantial improvements, multiple residences, livestock, and machinery supporting an integrated cattle operation.
- In December 1981, Robert petitioned for partition; the district court ordered a sale of the ranch property and equal division of proceeds rather than partition in kind.
- Joan appealed, challenging the order of sale.

## Issues

1. Whether the district court erred by ordering a sale and division of proceeds instead of partitioning the tenancy-in-common ranch property in kind.
2. Whether the district court’s findings sufficiently supported the conclusion that partition in kind would cause substantial prejudice to the owners.

## Decision

- The Supreme Court of North Dakota remanded with directions for reconsideration.
- The court held that partition in kind is generally preferred and that an order compelling sale must be supported by adequately developed findings.
- The court concluded the district court’s findings and analysis were insufficiently detailed to justify a forced sale based on substantial prejudice.

## Legal Principles

- Partition in kind is favored; a sale may be ordered only if partition in kind would result in substantial prejudice to the owners.
- “Substantial prejudice” exists when the value each cotenant would receive through partition in kind would be substantially less than the amount each would receive from sale of the property as a whole.
- In a bench trial, appellate review of factual findings applies the clearly erroneous standard under N.D.R.Civ.P. 52(a).
- A court ordering sale must make concrete, particularized findings demonstrating why in-kind division is impracticable or economically harmful, not merely rely on the property’s operation as a single unit.

## Conclusion

The court required the district court to apply the statutory preference for partition in kind and to make specific findings on whether in-kind division would substantially reduce the parties’ interests before ordering a forced sale.


Schnell v. Schnell, 346 N.W.2d 713 (N.D. 1984)