Justia North Dakota Supreme Court Opinion Summaries

Willis Swenson appealed, and Kyle Mahlum cross-appealed dismissal of Swenson’s claims against Mahlum and Mahlum’s claims against Carol Hodgerson, Gerard Swenson, Lee Alan Swenson, and Mary Ann Vig (“third-party defendants”). This suit arose over the ownership and leasing of real property in Burke County, North Dakota. Willis Swenson (“Swenson”) and the third-party defendants are the children of Robert and Junietta Swenson. In 2004, Robert and Junietta conveyed the property to their children as joint tenants, reserving a life estate for themselves. In 2005, Robert died and Junietta became the sole life tenant. In 2008, Junietta leased the property to Swenson. Swenson agreed to rental payments of $20,016 per year, due in installments. In December 2009, Swenson leased the property to Mahlum for $31,022.50 per year. The Swenson-Mahlum lease became effective in March 2010 and stated it would expire in October 2019. In November 2011, Swenson signed a new lease with Junietta, beginning in 2012 and ending in 2022. The lease permitted Swenson to assign or sublet the property to any person. In July 2012, Lee Swenson was appointed guardian and conservator for Junietta. In January 2013, Lee Swenson, as guardian and conservator, leased the same property to Mahlum that Willis Swenson already was leasing to Mahlum in the December 2009 lease. The new lease required Mahlum to pay Junietta $31,122.50 each year. Junietta died in November 2013. Mary Vig, as personal representative of Junietta’s estate, informed Mahlum that future rental payments should be split and made to each of Junietta’s children in equal amounts. In January 2017, Willis and his daughter, Dayna Johnson, sued Mahlum for unpaid rent. Swenson alleged Mahlum was required to pay him under the 2009 lease, and Mahlum failed to pay any rent in 2013, 2014, 2015, and 2016. Mahlum answered and filed a third-party complaint, suing the third-party defendants for unjust enrichment. He alleged in 2013 he paid Junietta under the terms of the 2013 lease. He also alleged in 2014, 2015, and 2016 he paid rent to each of Junietta children. Mahlum claimed that the third-party defendants have been unjustly enriched, and that the third-party defendants be ordered to pay Mahlum any amounts the court finds he owed Swenson if Swenson obtained a judgment against him. After review of the circumstances of this case, the North Dakota Supreme Court determined the trial court erred in its findings, and reversed dismissal of Swenson’s breach of contract claim. On remand, the court must decide the amount of damages Swenson was entitled to recover for his breach of contract claim against Mahlum for unpaid rent in 2013, including whether Swenson failed to mitigate those damages. In addition, the court must decide Mahlum’s claims against the third-party defendants. View "Swenson, et al. v. Mahlum, et al." on Justia Law

Keith Candee appealed an order entered on remand that denied his motion for contractual attorney fees and costs. Because the North Dakota Supreme Court found the parties’ settlement agreement and mutual release of claims was not “evidence of debt” under N.D.C.C. 28-26-04, the district court misapplied the law in holding the parties’ contractual provision providing for attorney fees was against public policy and void. The court abused its discretion in its decision denying his motion for attorney fees, and the Supreme Court reversed and remanded for further proceedings. View "Candee, et al. v. Candee" on Justia Law

Debra Heitkamp, the personal representative of the Estate of Nick Lyons, appealed a district court judgment in favor of Kevin Kabella following cross-motions for summary judgment, alleging the district court improperly determined the parties’ agreement was invalid because it fell within the limitation on the length of agricultural leases provided by N.D.C.C. 47-16-02. Kabella and Lyons entered into an agreement pertaining to farmland on March 29, 2007. The agreement gave Lyons possession and use of the property “in perpetuity.” In addition to receiving the property in perpetuity, the agreement stated Kabella could sell the property subject to Lyons’ right to purchase the property. Prior to the 2012 farming season, Kabella attempted to lease the property to Kermit Anderson Jr. Lyons refused to vacate the property asserting he was entitled to the use and possession of the property pursuant to his agreement with Kabella. Anderson brought an eviction action to remove Lyons from the property. Kabella was included as a defendant to allow a resolution of any issues regarding the agreement between Kabella and Lyons. In the litigation initiated by Anderson, Anderson and Kabella asserted the March 29, 2007 agreement between Kabella and Lyons was invalid under N.D.C.C. 47-16-02. Lyons passed away in May 2013, and Heitkamp was appointed personal representative of the estate. The estate used the property since that time. In March 2017, Heitkamp on behalf of Lyons' estate. sued for a declaration the agreement was valid in perpetuity. The district court granted summary judgment to Kabella and found the agreement was a lease that fell within the restrictions of N.D.C.C. 47-16-02, and due to the non-occurrence of any of the contingencies contained in the agreement, it expired on its tenth anniversary, March 29, 2017. The court awarded Kabella damages equal to the fair value of the use of the property subsequent to March 29, 2017. The North Dakota Supreme Court concluded "reasonable persons can draw more than one conclusion regarding the nature of the parties’ agreement," and therefore reversed judgment and remanded for a determination of whether this agreement was a lease subject to the limitations of N.D.C.C. 47-16-02, or a grant, option to purchase, or contract for deed outside the limitations of N.D.C.C. 47-16-02. Because the question of whether the limitation within N.D.C.C. 47-16-02 applied to the parties’ agreement remained undetermined, the Supreme Court declined to decide if the agreement was invalid after extending for a period of ten years. View "Heitkamp v. Kabella" on Justia Law

JRC Construction, LLC, appealed a judgment entered after a jury awarded Larry Pavlicek $217,244.55 in damages against JRC. The jury found JRC breached a contract with Pavlicek relating to construction work performed by JRC. JRC argued the district court erred in denying its motion and renewed motion for judgment as a matter of law because Pavlicek failed to prove he had a contract with JRC. Finding no reversible error, the North Dakota Supreme Court affirmed. View "Pavlicek v. American Steel Systems, Inc., et al." on Justia Law

Daniel and Debra Bearce (“the Bearces”) appealed a judgment entered in favor of Yellowstone Energy Development LLC (“Yellowstone”) after the parties’ cross motions for summary judgment. In June 2006, representatives of a business entity that would eventually become Yellowstone went to the Bearces' home seeking to purchase 170 acres of land they owned. Yellowstone successfully secured an exclusive option to purchase the land. In 2008, Yellowstone exercised its option to purchase the land and the parties entered into a contract for deed. In 2009, Yellowstone and the Bearces modified the contract for deed to alter some of the payment terms. Both the original contract for deed and the 2009 modified contract for deed included a term providing for the payment of a portion of the purchase price with “shares” of a contemplated ethanol plant. Yellowstone subsequently abandoned its plan to build an ethanol plant on the Bearces’ land. In July 2010, Yellowstone sent a letter to the Bearces advising them their $100,000 in “value” would be issued despite Yellowstone’s abandonment of the plan to build an ethanol plant. The letter stated ownership units had not yet been issued and explained the Bearces would receive their ownership interest “at the time shares are issued to all its members.” Shortly after receiving that letter, the Bearces executed and delivered a deed for the property to Yellowstone. In December 2011, and again in October 2012, the Yellowstone Board of Directors approved a multiplier of three units per $1 invested for individuals who had provided initial cash investment in Yellowstone. The Bearces’ interest in Yellowstone was not given the either 3:1 multiplier. The Bearces' objected, and Yellowstone continued to refuse to apply the multiplier to the Bearces' interest. When unsuccessful at the trial court, the Bearces appealed, challenging the district court’s exclusion of parol evidence to support their allegation of fraud in the inducement. The Bearces also challenged the district court’s conclusion the Bearces were not owed a fiduciary duty. After review, the North Dakota Supreme Court affirmed the district court’s judgment dismissing the Bearces’ claim for fraud and their claim for breach of contract. The Court reversed the district court’s dismissal of the Bearces’ claim for breach of a fiduciary duty and remanded for further proceedings. View "Bearce, et al. v. Yellowstone Energy Development, LLC" on Justia Law

Darilyn Baker, individually and on behalf of a class of more than 500 persons similarly situated, appealed dismissal of her class action against Autos, Inc. d/b/a Global Autos, Robert Opperude, James Hendershot, RW Enterprises, Inc., and Randy Westby, for claimed violations of the North Dakota Retail Installment Sales Act, N.D.C.C. ch. 51-13, and state usury laws. Baker also appealed an order denying her motion to amend the judgment. Baker argued the retail sellers failed to make required disclosures of certain finance charges and late fees in retail installment contracts and they lost their regulated lender status and were subject to state usury laws. After review, the North Dakota Supreme Court concluded the retail installment contracts failed to disclose loan fees as finance charges, and therefore reversed and remanded for further proceedings. View "Baker v. Autos, Inc., et al." on Justia Law

JPF Enterprises, LLC, appealed the grant of summary judgment awarding Baker Boyer National Bank $858,135.47 on its breach of contract claim and dismissing JPF’s counterclaim for fraud in the inducement. Baker Boyer loaned money to JPF for the purchase of thirty mobile homes from Jason Sundseth and his company, Vindans LLC, for use as rental housing in western North Dakota. In 2013, Vindans owned the homes and rented them to oil field workers through Greenflex Housing, LLC, and Greenflex’s rental manager, Badlands, LLC. Vindans purchased the homes with financing from Baker Boyer. In the summer of 2013, James Foust, managing owner of JPF, and Sundseth began negotiations for JPF to purchase the homes from Vindans, and JPF sought financing for the purchase from Baker Boyer. According to Foust, Baker Boyer’s loan officer obtained rental information from Greenflex Housing indicating the monthly rental proceeds from the thirty homes was $9,600 and would not service JPF’s anticipated monthly payments of about $15,000 for the loan. Foust also claimed Baker Boyer required JPF to contract with Greenflex Housing to rent the homes to oil field workers and informed him the arrangement would result in a return of $45,000 per month for the thirty homes. According to Foust, Vindans’ loan with Baker Boyer was near foreclosure and Baker Boyer failed to inform him that his purchase of the homes would not be profitable. In November 2015, JPF defaulted on its loan from Baker Boyer, and Baker Boyer sued JPF in North Dakota to enjoin JPF from transferring or disposing of the loan collateral, to take possession of the collateral, for appointment of a receiver, for sale of the collateral and for a money judgment. JPF answered and counterclaimed, admitting payments were not made as agreed and alleging fraud in the inducement. JPF claimed Baker Boyer acted as an intermediary for JPF’s purchase of the homes from Vindans and failed to disclose information to JPF about the physical condition of the homes, the financial condition of Vindans, and the uncertain financial viability of the home rentals. JPF sought an order requiring Baker Boyer to refund more than $600,000 that JPF paid to Baker Boyer in exchange for JPF transferring all right, title and interest in the homes to Baker Boyer. Finding no reversible error in the grant of summary judgment in favor of Baker Boyer, the North Dakota Supreme Court affirmed. View "Baker Boyer National Bank v. JPF Enterprises, LLC" on Justia Law

Chance Innis, Cammie Wold, and Roadrunner Hotshot & Services, LLC ("RHS"), appealed a judgment awarding Louis Tornabeni $145,536.53 from Innis, and awarding Tornabeni $477,521.49, jointly and severally, from Wold and RHS. Innis and Wold were brother and sister. Innis operated a sole proprietorship doing business as Roadrunner Hotshot, which initially delivered goods to, and cleaned shacks at, oil rigs in western North Dakota and later began renting equipment to oil companies including Continental Resources. Wold operated Roadrunner Hotshot for Innis until April 11, 2011, when he transferred the business to her and she renamed and reorganized the company as Roadrunner Hotshot & Services, LLC. DTC Consulting employed Tornabeni as a drilling consultant in western North Dakota and assigned him to work on oil rigs operated by Continental Resources as part of his employment with DTC Consulting. Tornabeni and Wold began a romantic relationship in late 2009 or early 2010. According to Tornabeni, he met with Innis, Wold, and Nick Barker at a Williston, North Dakota, restaurant in the spring of 2010. Tornabeni testified he and Innis orally agreed that Tornabeni would provide equipment to Innis, and Innis, through his business, would then rent the equipment to Continental Resources under a Master Service Agreement. According to Tornabeni, the parties agreed he would receive ninety percent of the rental profits, and Innis would receive ten percent of the rental profits. Tornabeni provided equipment to Innis from July 2010 until Innis transferred his business to Wold in April 2011. Tornabeni continued to provide the equipment rented by Continental Resources after Innis transferred his business to Wold. According to Tornabeni, he arranged the equipment rentals to Continental Resources and for the payments by Continental Resources to RHS. Tornabeni's involvement with equipment rentals to Continental Resources ended on January 1, 2013, and his romantic relationship with Wold ended in June 2013. Tornabeni sued Innis, Wold, and RHS, alleging Innis breached their oral contract requiring Innis to pay Tornabeni ninety percent of rental income generated from equipment owned by Tornabeni and rented to Continental Resources from July 2010 through April 11, 2011. Tornabeni also alleged that after Innis transferred his business to Wold, Wold and RHS were unjustly enriched by the rental of equipment to Continental from April 2011 through December 2012. The district court determined that Innis and Tornabeni had an oral contract requiring Innis to pay Tornabeni ninety percent of the rental profit from equipment rentals and that Innis breached the oral contract. Finding no reversible error in the district court's judgment, the North Dakota Supreme Court affirmed judgment against Innis, Wold and RHS. View "Tornabeni v. Wold" on Justia Law

Hurley Oil Properties, Inc. and Bill Seerup appealed a judgment awarding money damages instead of specific performance for Orville Hiepler's breach of contract, the Mineral Deed, conveying real property. Seerup and Hurley argued the mineral deed signed by Hiepler was enforceable and required Hiepler to convey the real property currently held by the revocable trust of which he is a settlor, trustee, and beneficiary. After review, the North Dakota Supreme Court concluded the mineral deed signed by Hiepler, settlor of the revocable trust, required conveyance of the property and accordingly, the district court erred in refusing to grant specific performance. View "Dale Exploration, LLC v. Hiepler" on Justia Law

Shannon Bakke appeals a judgment in favor of Magi-Touch Carpet One Floor & Home, Inc. and denial of her motion to amend her complaint. Bakke entered into a contract with Magi-Touch for the installation of floor tiles, a shower base, and related products in a bathroom within Bakke's home. Magi-Touch arranged to have the shower base and tile installed by VA Solutions, LLC, an independent contractor. Bakke contended the shower door was improperly installed; the improper installation resulted in the shower door imploding, and the implosion caused damage to property in and around the shower requiring the bathroom door and trim to be repainted. Bakke argued the district court erred in concluding she could not pursue a claim against Magi-Touch because Magi-Touch was not liable for the acts of its independent contractor. Bakke also asserts the district court erred in denying, as futile, her motion to amend her complaint to assert a contract claim against Magi-Touch. Assuming Bakke properly asserted a claim for breach of the parties' contract, the North Dakota Supreme Court held the delegation of Magi-Touch's obligation to provide labor to VA Solutions did not preclude a cause of action against Magi-Touch for a breach of the contract. Further, the Court held the existence of the independent contractor did not relieve Magi-Touch of its obligation to perform under the terms of its contract with Bakke. In the context of a claim for a breach of the parties' contract, the amendment was not futile and should have been allowed. The Court affirmed as to all other issues, and remanded this case for further proceedings. View "Bakke v. Magi-Touch Carpet One Floor & Home, Inc." on Justia Law