Justia North Dakota Supreme Court Opinion Summaries

In this case from the Supreme Court of North Dakota, Ryan Kratz, who had entered into a purchase agreement to buy a business and building from Donald and Carol McIlravy, failed to make the agreed-upon payments. The McIlravys initiated two eviction actions, and a separate action seeking damages, cancellation of the contract, and release of funds held in a trust account. The district court initially dismissed one of the eviction actions, but eventually ruled in favor of the McIlravys, awarding them damages and ordering release of the trust funds. Several years later, Kratz filed a motion under Rule 60(b), alleging the district court lacked subject matter jurisdiction over the eviction actions and seeking to vacate or void all findings, conclusions, and orders, except the dismissals of the eviction actions. The district court denied this motion and awarded attorney’s fees to the McIlravys.On appeal, the Supreme Court of North Dakota held that Kratz's appeal was limited to the judgment denying his Rule 60(b) motion and that the motion was timely. The court determined that the district court had jurisdiction over the eviction cases and that any violation of N.D.R.Ct. 7.1(b)(1) was harmless error. The court also held that the district court did not abuse its discretion in awarding attorney’s fees. Consequently, the court affirmed the decision of the lower court. View "Don's Garden Center v. The Garden District" on Justia Law

William Borlay appealed his eviction from an apartment for debts accrued under two leases, and an order for him to pay damages to Hegenes Apartment Management. In December 2021, Hegenes and Borlay executed a six-month lease for an apartment in Fargo. The lease term was from January 1 to June 30, 2022. Borlay owed $730 in rent each month under the lease. Due to a software error, Hegenes charged Borlay $670 instead of $730 during the first five months of the lease. Hegenes became aware of the error in May 2022 and notified Borlay of the error. Hegenes’ tenant ledger showed Borlay failed to pay $300 in rent from January 2022 through May 2022. In June 2022, Hegenes and Borlay executed another six-month lease, again for $730 in rent each month, plus $40 each month for garage rent. If Borlay failed to pay rent by the third day of each month, the lease authorized Hegenes to charge a $50 late fee. On September 9, 2022, Hegenes posted a three-day notice on Borlay’s apartment door. On September 30, 2022, Hegenes sued Borlay to evict him from the apartment, alleging he owed $1,220.50 in unpaid rent and late fees. After hearings on October 14 and October 21, 2022, the district court found Borlay failed to pay $1,220.50 in rent and late fees under both leases. After review of the tenant ledger and payments made subsequent to the notice of eviction, the North Dakota Supreme Court concluded the district court erred in concluding Hegenes was entitled to a judgment of eviction on the basis of a failure to pay rent under the expired January lease. The Court reversed the judgment and remanded for a determination of whether Hegenes was entitled to evict Borlay for his late payment of rent in September 2022 and, if so, for consideration of an award of attorney’s fees limited to that proceeding. View "Hegenes Apartment Management v. Borlay, et al." on Justia Law

Transform Operating Stores, LLC d/b/a Transformco Operating Stores LLC; Transform SR Brands LLC d/b/a Transformco d/b/a Kmart; and Transform KM LLC (collectively, “Transform”) appealed after a North Dakota district court entered an order awarding damages to Ted J. Boutrous, L.L.C. and The Boutrous Group, LLP and entered a [second] amended judgment of eviction. The North Dakota Supreme Court concluded the district court did not err finding a material breach of the lease and in exercising jurisdiction as a summary eviction. "While the court abused its discretion in bifurcating the eviction action, that error was harmless." The Court further concluded Transform failed to timely appeal the court’s contempt order for the untimely turnover of the property. View "Boutrous, et al. v. Transform Operating Stores, et al." on Justia Law

Lisa Poitra appealed an order of eviction, arguing the district court lacked jurisdiction to enter the eviction order because the Trenton Indian Housing Authority (“TIHA”) constituted a dependent Indian community, and a contract provision required the eviction to be handled by the Turtle Mountain Band of Chippewa Indians Tribal Court. The North Dakota Supreme Court concluded the record supported the district court’s finding that TIHA was not a dependent Indian community, the court’s determination that it had subject matter jurisdiction, and the finding TIHA did not have a contractual obligation to bring the eviction action in the tribal court. View "Trenton Indian Housing Authority v. Poitra, et al." on Justia Law

Ralph Fischer appealed from an order denying his request for attorney’s fees under N.D.C.C. 27-08.1-04. In February 2018, Fischer and Darin Hoyt executed a Cattle Share Lease. Under the terms of the lease, Fischer rented pasture land to Hoyt. In July 2019, Fischer sued Hoyt in small claims court arguing he was entitled to $15,000 for Hoyt’s failure to pay pasture rent in 2018. Hoyt removed the case to district court and filed an answer and counterclaim, asserting Fischer breached terms of the agreement. Fischer answered the counterclaim and requested attorney’s fees under N.D.C.C. 27-08.1-04. In February 2020, Fischer received leave of court to amend his complaint and increased his alleged damages to $25,000. After a bench trial, the district court found both parties breached the lease in different respects. Pertinent here, the district court found Hoyt breached the lease by failing to pay rent in 2018. The district court denied Fischer’s request for attorney’s fees, finding "the claims and counterclaims in this matter were far too complex for small claims court and would have been dismissed without prejudice to refile in district court." To the North Dakota Supreme Court, Fischer argues the district court erred in denying his request because he is the prevailing plaintiff after removal from small claims court. Fischer also argued he was entitled to attorney’s fees incurred in this appeal. The Supreme Court agreed, and reversed and remanded for an award of Fischer’s attorney’s fees in the district court action and on appeal. View "Fischer v. Hoyt" on Justia Law

Tioga Properties, LLC, appealed a district court judgment awarding Wades Welding, LLC $27,669.90 relating to Wades Welding’s lawsuit for enforcement of construction liens and unjust enrichment. Janice Ellsworth owned Tioga Properties. Tioga Properties owned a restaurant and home (referred to by the parties as a “mobile home”) adjacent to each other in Tioga, North Dakota. Susan Gordon leased the restaurant from Tioga Properties. Gordon delivered rent payments to John Ellsworth Jr., Janice Ellsworth’s son. Gordon resided in the home but had no written lease for that property. In late 2016 and early 2017, Gordon hired Wades Welding to repair the home and restaurant. Wades Welding performed $19,840 of work on the home and $2,500 of work on the restaurant. Wades Welding delivered the invoices for its work to Ellsworth Jr. A day after Wades Welding completed its work at the home, Ellsworth evicted Gordon from the restaurant and home. Ellsworth Jr. supervised the eviction and Gordon left both properties within 48 hours. In December 2017, Wades Welding recorded construction liens against the properties after Tioga Properties failed to pay for the repairs. Tioga Properties sold the restaurant in July 2019. In September 2019, Tioga Properties served on Wades Welding a demand to enforce the home lien. In October 2019, Wades Welding sued Tioga Properties for breach of contract, foreclosure of the construction liens and unjust enrichment. Tioga Properties denied the allegations, claiming it did not authorize Wades Welding's work on the properties. The district court found Wades Welding's construction liens on both properties were valid, and ordered foreclosure of the home lien. The court found the lien on the restaurant was unenforceable due to a service error, but nonetheless awarded Wades Welding the amount of the repaired under the doctrine of unjust enrichment. Finding no reversible error in the district court's judgment, the North Dakota Supreme Court affirmed judgment in favor of Wades Welding. View "Wades Welding v. Tioga Properties" on Justia Law

Edwin Schulz appealed a judgment following a bench trial on the damages to his barn, pole barn and shed. Schulz sued Adam Helmers for negligence and breach of contract following a fire that destroyed the barn, pole barn and shed. At the time of the fire, Schulz was leasing the farmstead to Helmers, including the three buildings. He argued the district court applied the wrong measure of damages in his breach of contract claim against Helmers. The district court concluded N.D.C.C. 32-03-09.1 applied to the breach of contract claim, which provided the measure of damages for an injury to property not arising from contract was the diminution of value. The North Dakota Supreme Court concurred with the district court's finding and affirmed the judgment. View "Schulz v. Helmers" on Justia Law

Biron D. Baker Family Medicine, PC and Biron D. Baker, M.D. (collectively, "Baker Medicine") appealed a district court judgment awarding Big Pines, LLC attorney’s fees and costs. In 2011, Baker Medicine signed an agreement to lease commercial property from Phoenix M.D., L.L.C. Baker executed the lease personally and for Baker Medicine as its president. Baker Medicine allegedly vacated the premises several months prior to the end of the lease and in a damaged condition. Phoenix subsequently sold the building to Big Pines, and assigned its interest in the lease to Big Pines as part of the sale. Big Pines sued alleging breach of the lease by Baker Medicine and breach of the personal guaranty by Baker. A jury found Baker Medicine and Baker breached the lease and awarded Big Pines $18,750 in damages. Big Pines later moved for an award of attorney’s fees under the personal guaranty. The district court denied Big Pines’ request, concluding the personal guaranty was not assigned to Big Pines. The district court's judgment with respect to the fees was reversed by the North Dakota Supreme Court on Big Pines' appeal. On remand, Big Pines again moved for attorney's fees, "as well as any future fees and costs until the case is “fully and finally dismissed." This motion was granted, and Baker Medicine appealed, arguing the district court erred in calculating the recoverable amount of attorney's fees incurred by Big Pines. Concluding the district court provided it with a discernible basis for the fee award, the Supreme Court found the district court did not abuse its discretion in issuing its judgment on fees. Accordingly, judgment was affirmed. View "Big Pines, LLC v. Baker, et al." on Justia Law

Shadow Industries, LLP, appealed a district court judgment dismissing its eviction action and holding the tenants David and Chris Hoffman had timely exercised their option to extend the term of the parties’ lease agreement. Shadow argued the district court erred in finding the parties’ lease agreement to be ambiguous, finding the option to extend the lease expired on February 1, 2019, and finding the Hoffmans timely exercised their option to extend the lease. The North Dakota Supreme Court found the district court’s interpretation of the lease as having ambiguity as to when the lease terminated was premised upon the court’s observation that “[w]hen ‘crop years’ end and begin is undefined.” To this, the Supreme Court disagreed that the lease was ambiguous and failed to define the end of the lease. The Supreme Court found the lease terminated at the end of the 2018 crop year. "While determining when the end of the 2018 crop year occurred may be a question of fact, the term is not ambiguous simply because it requires a future event or contingency." There was testimony that the crop year ended no later than October 2018; following the harvesting of their crops and still in 2018, the Hoffmans deep ripped the land, tilled to create fall bedding, and applied fertilizer to prepare for the 2019 crop year. "On the basis of these facts, and the absence of any contrary facts in the record, we conclude as a matter of law the 2018 crop year ended and the lease terminated in 2018." Because the facts of this case compelled a finding the 2018 crop year ended in 2018 and the lease terminated at the end of the 2018 crop year, the Court found the exercise of the option in January 2019 was not timely and the lease terminated. It therefore reversed judgment and remanded for further proceedings. View "Shadow Industries, LLP v. Hoffman, et al." on Justia Law

Big Pines, LLC, appealed from a district court order denying its “Motion for Award of Attorneys’ Fees and Costs.” Phoenix M.D., L.L.C., as landlord, entered into a lease agreement for real property with Biron D. Baker Family Medicine PC, as tenant, on May 3, 2011. The lease began on June 15, 2011, and ended on June 14, 2016. At the same time the lease was entered, Biron Baker signed a personal guaranty agreement making him personally liable for a breach of the terms of the lease. Under the guaranty, the landlord was also entitled to recover “all costs and attorneys’ fees incurred in attempting to realize upon [the guaranty].” In August 2016, Big Pines, LLC purchased the property formerly leased by Baker Medicine from Phoenix. The guaranty agreement was not specifically mentioned in the assignment agreement. However, the assignment stated a copy of the “Lease Agreement” was attached to the assignment as “Exhibit A.” In March 2017, Big Pines contacted Baker regarding damages to the property in violation of the terms of the lease that resulted from Baker Medicine’s tenancy. Baker denied any responsibility and refused to pay for the alleged damages. Big Pines filed suit against Baker and Baker Medicine in February 2018 claiming the property damages resulted from Baker Medicine’s tenancy and were in violation of the terms of the lease. The case proceeded to trial, and at trial a jury found Baker and Baker Medicine liable for breaching the terms of the lease and awarded $18,750.00 in damages to Big Pines. Big Pines filed a post-trial motion under N.D.R.Civ.P. 54(e)(3) requesting the district court award Big Pines its attorney’s fees for having to bring suit against Baker and Baker Medicine for breaching the terms of the lease. Finding that the district court erred in interpreting the lease and guaranty as separate agreements, the North Dakota Supreme Court reversed the district court which denied the attorneys' fees. View "Big Pines v. Baker, et al." on Justia Law