Grengs v. Grengs
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This case involves a dispute that arose after a divorce between Greg Grengs and Lisa Genareo (formerly Lisa Grengs). As part of the divorce settlement, the Supreme Court of North Dakota ordered that property owned by GLG Farms, LLC, a company established by Grengs to hold ownership of his farm property and equipment, be mortgaged to provide Genareo with security for a property settlement payment valued at $1,300,000. Following the court order, two new members were added to GLG Farms, LLC, and the company filed for bankruptcy protection. Grengs and GLG Farms, LLC, then entered into a stipulation agreement in bankruptcy court, agreeing to mortgage terms and payment terms. However, GLG Farms, LLC, later argued that the two new members of the company were not required to execute the mortgage and that the agreement in bankruptcy court had little impact on the court's decision.
The Supreme Court of North Dakota affirmed the district court's order, holding that Grengs acted as an ostensible agent of GLG Farms, LLC, with apparent authority. The court found that Genareo was right to believe that GLG Farms, LLC, consented to Grengs acting as its agent, thus binding the company to the stipulation agreement. The court concluded that GLG Farms, LLC, ratified Grengs' actions by embracing their advantages and using them in judicial proceedings and did not timely disavow Grengs' actions.
The court also rejected GLG Farms, LLC's argument that the district court failed to adequately describe the terms of the required mortgage, pointing out that a statutory mortgage form exists and that the amounts due by Grengs were plainly provided in the stipulation. The court further found GLG Farms, LLC's argument that North Dakota law does not provide a standard mortgage to be frivolous, awarding Genareo $1,000 as a sanction.
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