## Facts

- In 1906, William and Lizzie Washburn conveyed a quarter section of land by warranty deed to Emil Borchardt.
- The original deed was unavailable; the county recorder’s transcription was the operative record.
- The recorded deed identified the Washburns as the “parties of the first part” (grantors) and Borchardt as the “party of the second part” (grantee).
- The recorded reservation clause stated that the “second party” was “reserving and excepting” all coal in the land, plus surface and access rights needed for mining.
- U.S. Bank, as successor to the Washburns, brought a quiet-title action alleging the “second party” wording was a clerical/transcription mistake and the coal was intended to be reserved to the grantors.
- The Koenigs, as successors to Borchardt, argued the deed’s face reserved coal to the grantee and that U.S. Bank failed to prove the requirements for reformation.
- The district court granted summary judgment for the Koenigs and quieted title to the coal in them.
- U.S. Bank appealed.

## Issues

1. Whether the recorded deed’s clause stating the “second party” reserved the coal should be construed, as a matter of law, to reserve the coal to the grantors due to an apparent clerical/transcription mistake.
2. Whether resolving the dispute required equitable reformation proof (e.g., clear and convincing evidence of mutual mistake) or could be decided through deed construction principles on summary judgment.

## Decision

- The North Dakota Supreme Court reversed the summary judgment for the Koenigs.
- The Court held the deed, properly construed, reserved the coal to the Washburns (the grantors) and their successors.
- The Court remanded with instructions to enter judgment consistent with that construction, effectively quieting title to the coal in U.S. Bank as successor to the grantors.

## Legal Principles

- Deeds are construed to effect the grantor’s intent as shown by the instrument as a whole.
- Courts avoid interpretations that produce unreasonable results when the document’s structure indicates a different intended meaning.
- Where a deed contains an obvious clerical or transcription misdesignation apparent from the face of the instrument, a court may construe the deed to correct the misstatement without requiring the full evidentiary showing typical of equitable reformation.
- If material facts are undisputed and the dispute turns on construction of a written instrument, the issue is a question of law suitable for summary judgment and appellate resolution.

## Conclusion

The court treated the “second party” coal reservation language as an apparent recording/drafting mistake inconsistent with the deed’s structure and the function of a reservation, and construed the instrument to reserve the coal estate to the grantors rather than the grantee.


U.S. Bank Nat’l Ass’n v. Koenig, 650 N.W.2d 820 (N.D. 2002)