Justia North Dakota Supreme Court Opinion Summaries

Appellants Cendak Development Corporation and Fort Rice Bar & Grill, Inc. (Cendak), appealed a judgment entered in favor of Plaintiffs-Appellees Richard and Mary Bendish, which cancelled the Bendishes' contract for deed with James Castillo and held Cendak had no right to redeem the property under a lease purchase agreement. This issue in this case centered on the cancellation of a contract for deed. In 2003, Bendishes owned land in Fort Rice where they operated a business called the "Outpost." In March 2003, the Bendishes entered into a contract for deed to sell the property to Castillo for $40,400. Castillo made a down payment of $7,500 and was to make monthly payments of $620.86 on the contract for deed, with an annual interest rate of five percent. Castillo made regular payments on the contract for deed through January 1, 2005. In 2006, Richard Bendish, Castillo, and Ivan Gange, on behalf of Cendak, executed a "Lease Purchase Agreement," which included handwritten notations initialed by each of the parties. The agreement was not filed with the Morton County Register of Deeds. Castillo and then Gange operated the Fort Rice Bar & Grill on the premises. After January 2005, Bendishes received sporadic payments from Castillo and then Gange. In 2010, the Bendished sued Castillo alleging default under the terms of the contract for deed. Cendak answered the suit, alleging that Castillo had assigned the contract to Cendak, the Bendishes accepted the assignment and accepted payments from Cendak pursuant to the contract. The issue on appeal before the Supreme Court was whether the district court erred when it failed to give Cendak a period of redemption in the action to cancel the contract for deed. Upon review, the Supreme Court affirmed: "Based upon the language of the Lease Purchase Agreement and the equities of the situation, we cannot say that the district court acted in an arbitrary, unreasonable, or unconscionable manner, or that its decision was not the product of a rational mental process leading to a reasoned determination. We therefore conclude the district court did not abuse its discretion in refusing to grant Cendak a redemption period." View "Bendish v. Castillo" on Justia Law

The Industrial Commission and Slawson Exploration Company appealed a district court judgment that reversed the Commission's assessment of a risk penalty against Gadeco, LLC. The issue in this case arose from a challenge to the validity of an invitation to participate in the cost of drilling a well which resulted in the Commission's assessment of a 200 percent risk penalty. Because the Supreme Court was unable to discern the basis for the Commission's decision, the Court reversed the judgment and remanded the case back to the Commission for the preparation of findings that explain the reasons for its decision. View "Gadeco v. Industrial Commission" on Justia Law

Defendants-Appellants Dakota Sanitation Plus, Inc. (DSP) and Peggy Becker appealed a district court judgment that awarded Plaintiff-Appellee Mark Rickert the value of his shares in DSP at the time the corporation was dissolved in December 2007. Prior to his death in 1998, Harvey Rickert operated an unincorporated trash removal business called Dakota Sanitation which had a contract to provide residential trash removal for the City of Mandan. Becker lived with and was engaged to Harvey Rickert, and she worked in the trash removal business with him. Becker, Mark Rickert, and Kim Rickert thereafter incorporated DSP, with each owning one-third of the shares. Becker was the president of the corporation and was in charge of its daily operations. The three stockholders shared the corporate profits equally. DSP provided residential trash removal under the existing contract with Mandan and, when that contract expired in October 2007, DSP was awarded a new contract for trash removal in Mandan through October 2012. Becker contended the shareholders had entered into an unwritten agreement which provided that, after expiration of the original Mandan contract in 2007, the corporation would be dissolved, Becker would receive all the assets of DSP, and Becker would acquire "the sole and exclusive right to the City of Mandan contract." At a special shareholders' meeting in December 2007, Becker and Kim Rickert voted to dissolve DSP. Mark Rickert voted against dissolution. All of the corporate assets, including the new Mandan contract, were subsequently transferred to Armstrong Sanitation and Rolloff, Inc., a separate corporation solely owned by Becker. Mark Rickert made a written demand for payment of the fair value of his shares as a dissenting shareholder. When DSP and Becker failed to comply with Mark Rickert's demand, sued for recovery of the fair value of his shares on the date of dissolution and damages for fraud. DSP and Becker answered and counterclaimed, with Becker seeking damages against Mark Rickert for unjust enrichment. DSP and Becker argued that Mark Rickert was not entitled to payment for the value of his shares because of the alleged unwritten shareholder agreement that DSP would be dissolved in 2007 and Becker would receive all of the corporate assets, with no compensation to Mark Rickert or Kim Rickert. Upon review, the Supreme Court concluded the district court did not err in its judgment against Mark Rickert. The Court affirmed the district court. View "Rickert v. Dakota Sanitation Plus" on Justia Law

Defendant-Appellant Nodak Mutual Insurance Company appealed from a judgment awarding Plaintiff-Appellee Barry Myaer $34,933.24 plus interest in his breach of contract action against Nodak. Upon review, the Supreme Court concluded the district court did not err in ruling Plaintiff was entitled to deferred commissions payable to him in December 2009, but did err in ruling those commissions could exceed 10 percent under the terms of the parties' contract. View "Myaer v. Nodak Mutual Insurance Co." on Justia Law

Petitioner-Appellant Lyle Hollingsworth, as personal representative of the Estate of Audrey Hollingsworth, appeals from a district court judgment determining the distribution of insurance proceeds. Jerry Hollingsworth, Petitioner's brother had lived in a house he shared with their mother Audrey and continued to live there after her death. The house was insured under a farm and ranch policy issued by Nodak Mutual Insurance Company (Nodak) which listed Jerry Hollingsworth as the primary insured, with Audrey Hollingsworth listed as an additional insured. After Audrey Hollingsworth's death, the Estate was listed as the additional insured. The house was destroyed by fire in 2006. Nodak issued several checks made payable to Jerry Hollingsworth and the Estate for the loss. Disputes arose over the various heirs' rights in the insurance proceeds, and Lyle Hollingsworth, as personal representative of the Estate, began proceedings in the informal probate requesting that the district court order a division of the insurance proceeds. Following an evidentiary hearing, the district court issued its findings of fact, conclusions of law, and order for judgment directing division of various components of the insurance proceeds between Jerry Hollingsworth and the Estate. The court concluded that the portion of the insurance proceeds paid for loss of the dwelling should be divided on the basis of the relative percentage value of Jerry Hollingsworth's life estate and the Estate's remainder interest, as calculated by actuarial tables. Finding that there was an "unsupervised probate" of the case, it could not be appealed without a Rule 54(b) certification. Because the district court's judgment resolved some but not all of the disputed between the parties in this case, the disbursement of the insurance proceeds was not a final, appealable judgment. The Supreme Court determined it did not have jurisdiction to hear the case further, and dismissed the appeal. View "Estate of Hollingsworth" on Justia Law

JB Mineral Services, LLC (JB), appealed the grant of summary judgment declaring an oil and gas lease terminated and awarding statutory damages, costs, and attorney fees to Dahn P. Beaudoin and J. Willard Beaudoin, as trustees of the William Beaudoin Irrevocable Mineral Trust (Beaudoins). JB sought to lease the Beaudoins' oil and gas interests, and sent a lease, a supplemental agreement and a document it alleged was a "120-say sight draft" for $165,000. Later, JB sent a revised lease and a 25-day sight draft to Beaudoins, reflecting JB's claim that Beaudoins owned 3.68 fewer mineral acres than covered in the original lease. The revised lease would also have extended the term of the lease approximately six months longer than a July 2009 lease. Beaudoins never executed or agreed to the revised lease and did not present the second sight draft for payment. Beaudoins claim that the "termination date" under the supplemental agreement was January 12, 2010, which was 120 business days after they signed the lease and supplemental agreement in July, 2009. JB's position was that it had until January 20, 2010, to pay a supplemental bonus payment by funding the July 2009 sight draft. Beaudoins' counsel responded by faxed letter dated January 20, 2010, reiterating that the lease had already terminated and was invalid. JB never authorized payment of the July 2009 sight draft, but recorded the original July 2009 lease on January 20, 2010. Beaudoins sued JB to have the lease declared invalid and for statutory damages, costs, and attorney fees. Upon review, the Supreme Court affirmed summary judgment in favor of the Beaudoins, finding the district court did not err in concluding JB failed to timely pay or tender the sum required to continue the 2009 lease and that the lease automatically terminated by its express terms. View "Beaudoin v. JB Mineral Services" on Justia Law

The Marcil Group, Inc. (TMGI), Michael J. Marcil, and Arthur S. Rosenberg appeal from a judgment awarding Alerus Financial, N.A., $2,520,383.07 based on guaranties they had given Alerus for a commercial real estate loan made to KRE, LLC. In 2008, KRE received a loan from Alerus to purchase commercial real estate in Fargo. Marcil and Rosenberg are respectively the chief executive officer and president of TMGI, which holds 51 percent of KRE's stock. KRE granted Alerus a first mortgage against the property purchased with the loan proceeds. TMGI, Marcil, and Rosenberg individually executed separate documents guaranteeing KRE's debt. In 2010, KRE defaulted on the promissory note. Alerus declared the entire balance of the loan due, commenced a foreclosure action against KRE, and indicated it would not seek a deficiency judgment against KRE but would instead pursue its available remedies against the guarantors. In 2011, the district court granted Alerus's motion for summary judgment in the foreclosure action against KRE and scheduled a sheriff's sale of the property for early March 2011. KRE filed for bankruptcy shortly before the scheduled sale, and the sheriff's sale was cancelled. During this time, Alerus had also begun a separate action against TMGI, Marcil, and Rosenberg to enforce the guaranties. After Alerus moved for summary judgment, the guarantors moved to dismiss the action. The district court granted Alerus's summary judgment motion and denied the guarantors' motion to dismiss. The court concluded there were no genuine issues of material fact and held TMGI, Marcil, and Rosenberg jointly and severally liable under the terms of their guaranties. In June 2011, while this appeal was pending, Rosenberg filed for bankruptcy. Rosenberg's appeal was stayed pending discharge of his bankruptcy proceedings. Upon review, the Supreme Court concluded TMGI and Marcil did not present sufficient evidence to raise genuine issues of material fact about fraud, mistake, waiver, or estoppel. Therefore, the district court did not err in granting Alerus's motion for summary judgment. View "Alerus Financial v. Marcil Group" on Justia Law

Plaintiff Chase Wisness appealed the district court's grant of summary judgment in favor of Nodak Mutual Insurance Company (Nodak), finding its Farm and Ranch Excess Liability Policy did not provide coverage for his claim. Plaintiff argued on appeal that the district court erred by finding the insurance policy did not provide underinsured motorist coverage. In 2007, Plaintiff was a passenger in a vehicle driven by an unrelated third party. An accident occurred, and Plaintiff was injured and is now a paraplegic. At the time of the accident, Milo Wisness, Plaintiff's father, owned a Nodak Mutual automobile insurance policy with underinsured motorist limits of $500,000. Milo Wisness also owned a Farm and Ranch Excess Liability Policy issued by Nodak. Plaintiff settled with Nodak for underinsured limits on the automobile policy and reserved the right to pursue a claim under the excess liability policy. Plaintiff then sued alleging that Nodak wrongfully denied his claim under his excess liability policy because the policy provided underinsured motorist coverage, that Nodak used bad faith when denying the claim and that his father's insurance agent negligently counseled Milo Wisness about what insurance policy to buy. Nodak and the agent denied the allegations. Plaintiff moved for partial summary judgment, asking the court to declare coverage existed for his claim. Judgment was entered awarding Nodak its costs and dismissing Wisness's claim with prejudice. Upon review, the Supreme Court agreed with the district court's conclusion that the excess liability policy did not cover Plaintiff's claim, and affirmed the court's decision. View "Wisness v. Nodak Mutual Ins. Co." on Justia Law

Benz Farm, LLP ("Benz") appealed a summary judgment dismissing its action against Cavendish Farms, Inc. ("Cavendish") for breach of contract and violation of the Unlawful Sales or Advertising Practices Act, and awarding Cavendish attorney fees. In 2006, Cavendish and Benz entered into written agreements for the sale and purchase of potatoes. One was a "Grower Storage Agreement," under which Benz agreed to grow and sell, and Cavendish agreed to buy, 150,000 hundredweight of potatoes, to be stored after harvest by Benz until Cavendish directed they be delivered to its processing plant. The second agreement was a "Company Storage Agreement," under which Benz agreed to grow and sell, and Cavendish agreed to buy, 113,000 hundredweight of potatoes, to be delivered to and stored by Cavendish. The parties also entered into a written credit agreement, whereby Cavendish agreed to provide financing for Benz's expenses in growing the potatoes. Benz claims that there were numerous oral agreements regarding the dates that Cavendish would accept deliveries, but that Cavendish accepted only limited deliveries on those dates, causing inefficiencies and additional expenses for Benz. Upon review, the Supreme Court concluded: (1) the district court did not err in granting summary judgment dismissing Benz's breach of contract claims; (2) the Unlawful Sales or Advertising Practices Act did not apply to, or create a cause of action against, a purchaser; (3) the district court did not abuse its discretion in denying Benz's motion to amend its complaint; and (4) the district court did not err in awarding Cavendish attorney fees. View "Benz Farm, LLP v. Cavendish Farms, Inc." on Justia Law

K & L Homes appealed a district court judgment based upon a jury verdict in favor of Neal Leno and Susan Leno ("the Lenos"). On appeal, K & L Homes argued: (1) the district court erred by deciding K & L Homes had not sufficiently raised the defense of fault by the Lenos in its answer; (2) the court erred by refusing to instruct the jury on comparative fault, the court erred by denying K & L Homes' request for inspection and not allowing a defendant to testify on his observations during a jury viewing; and (3) the court erred by ruling K & L Homes had not disclaimed any implied warranties as a matter of law. The Lenos purchased a newly-constructed house from K & L Homes. The Lenos alleged they noticed cracks, unevenness, and shifting due to improper construction not long after purchasing the house from K & L Homes. Initially, the Lenos claimed K & L Homes was negligent, breached the parties' contract, and breached implied warranties. The Lenos claimed the parties' contract implied warranties that the house would be built according to the applicable codes, that it would fit its purpose as a residence, and that it would be constructed according to engineering standards and in a workmanlike condition. K & L Homes requested the jury be instructed on comparative fault, but the district court denied the proposed comparative fault instruction. The district court decided K & L Homes had not adequately pled fault, and comparative fault did not apply to Lenos' cause of action. The district court also found, as a matter of law, that K & L Homes had not disclaimed any implied warranties in a Homeowners' Guide given to the Lenos at the closing on the house. Upon review, the Supreme Court agreed with the findings made by the district court and affirmed its decisions as to all issues raised on appeal. View "Leno v. K & L Homes" on Justia Law