Justia North Dakota Supreme Court Opinion Summaries

The federal district court for the District of North Dakota certified five questions regarding N.D.C.C. § 38-08-08(1) and North Dakota Industrial Commission pooling orders. The litigation before the federal court involved allocation of mineral royalties in the case of overlapping oil and gas spacing units. Allen and Arlen Dominek owned oil and gas interests in Williams County, North Dakota. In 2011, the North Dakota Industrial Commission pooled the interests in Section 13 on the Dominek property with the interests in Section 24 in a 1280-acre spacing unit (the “Underlying Spacing Unit”). In 2016, the Commission pooled the interests in Sections 11, 12, 13, and 14 in a 2560-acre spacing unit (the “Overlapping Spacing Unit). The "Weisz" well terminated in the southeast corner of Section 14. The Defendants (together “Equinor”) operated the Weisz well. The Domineks sued Equinor in federal district court to recover revenue proceeds from the Weisz well. The parties agreed production from the Weisz well should have been allocated equally to the four sections comprising the Overlapping Spacing Unit. Their disagreement was whether the 25% attributable to Section 13 should have been shared with the interest owners in Section 24 given those sections were pooled in the Underlying Spacing Unit. In response to the motions, the federal district court certified five questions to the North Dakota Court. Responding "no" to the first: whether language from N.D.C.C. § 38-08-08(1) required production from Section 13 to be allocated to Section 24, the Supreme Court declined to answer the remaining questions because it found they were based on an assumption that the Commission had jurisdiction to direct how production was allocated among mineral interest owners. "Questions concerning correlative rights and the Commission’s jurisdiction entail factual considerations. ... An undeveloped record exposes this Court 'to the danger of improvidently deciding issues and of not sufficiently contemplating ramifications of the opinion.'” View "Dominek, et al. v. Equinor Energy, et al." on Justia Law

J.T. Wilkinson and Evelyn Wilkinson acquired title to property located in Williams County, North Dakota. In 1958, the Wilkinson conveyed the property to the United States for construction and operation of the Garrison Dam and Reservoir, but they reserved the oil, gas and other minerals in and under their property. Plaintiffs are the Wilkinson’ successors in interest. Plaintiffs appealed a judgment dismissing their takings, conversion, unjust enrichment, civil conspiracy and 42 U.S.C. 1983 claims against the Board of University and School Lands (“Land Board”), Department of Water Resources, and Statoil Oil & Gas LP. In 2010 and 2011, the Land Board entered into four oil and gas leases with oil operators in Williams County. The Land Board received and retained bonus payments from the oil operators. In 2012, plaintiffs sued the Land Board and oil operators to quiet title to disputed mineral interests in the conveyed property. Among other things, plaintiffs argued the State effectuated a taking of their royalties, and the State was unjustly enriched while the royalties were held in escrow at the Bank of North Dakota because the Bank was asking as the agent for the Land Board. Finding that the trial court did not err in rendering judgment against plaintiffs, the North Dakota Supreme Court affirmed that court’s judgment. View "Wilkinson, et al. v. Bd. of University and School Lands of the State of N.D." on Justia Law

The underlying dispute before the North Dakota Supreme Court in this case concerned two competing oil and gas leases. In 2006, Ritter, Laber and Associates, Inc. was part of a joint venture that was locating mineral owners and leasing their interests. Eugene and Carol Hanson entered into a lease agreement with Ritter ("EOG lease") and a "Side Letter Agreement" was executed at the same time, allowing Ritter to “exercise its option” to lease the minerals. If Ritter chose not to exercise the option, Ritter was required to “immediately release [the Hansons] from any further obligation.” The EOG Lease was not immediately recorded. In April 2007, Eugene and Carol Hanson executed a warranty deed to their son and daughter-in-law, Kelly and Denise Hanson, which included the minerals in question and was recorded. The deed reserved a 50% life estate in the minerals. In May 2007, Ritter recorded a “Memorandum of Oil and Gas Lease Option” that referenced the EOG Lease. In July 2007, Ritter recorded the EOG Lease and sent Eugene and Carol Hanson a letter stating it “has elected to exercise its option to lease.” In August 2007, Ritter’s partner sent the couple a check for roughly $37,000 “as total consideration for your Paid up Oil and Gas Lease dated December 20, 2006.” In September 2007, Ritter assigned the EOG Lease, along with a batch of other leases, to EOG. The assignment was recorded. In December 2007, Ritter obtained an oil and gas lease from Kelly and Denise Hanson listing the tracts in question ("Northern Lease"). It was recorded in January 2008 and assigned to Northern in June 2008. Northern filed suit seeking a declaration of what it owned. The court determined the transaction between Eugene and Carol Hanson and Ritter created an option to lease, Denise and Kelly Hanson had no notice of the option, and they took title to the minerals free of it. The court entered a partial judgment determining “the EOG Lease is not valid and subsisting insofar as it conflicts with the Northern Lease.” EOG Resources, Inc. appealed and Northern cross appealed, arguing the court erred when it declined to grant additional relief after its title determination. The Supreme Court held the district court erred when it quieted title in Northern. Judgment was reversed and the matter remanded for further proceedings. View "Northern Oil & Gas v. EOG Resources, et al." on Justia Law

On June 23, 2021, Kathy Schmidt filed a quiet title action covering property located in Benson County, North Dakota, offering a document titled “warranty deed” as evidence of title. The district court granted the defendants’ N.D.R.Civ.P. 12(b) motion to dismiss the complaint with prejudice based on lack of standing and res judicata. Schmidt filed two motions for reconsideration arguing the court failed to consider new evidence. She appealed when the trial court denied her motions. The North Dakota Supreme Court found the district court did not err in dismissing Schmidt’s complaint based on standing. Because the warranty deed did not convey Schmidt a valid interest in the property, she failed to meet the requirements in N.D.C.C. § 47-10-05. Therefore, she did not have standing to bring a quiet title claim. Additionally, since the invalidity of the warranty deed was litigated and a final judgment was rendered, the district court did not err in dismissing Schmidt’s complaint based on res judicata. View "Schmidt v. Hageness, et al." on Justia Law

Whitetail Wave LLC (“Whitetail”) appealed two district court judgments granting summary judgment and dismissing claims asserted by Whitetail against XTO Energy, Inc. (“XTO”) and the Board of University of School Lands of the State of North Dakota, the State of North Dakota, and the Department of Water Resources and Director (collectively “State”). Whitetail argued the court erred by: (1) dismissing its claim asserting the State had committed an unconstitutional taking of its property interest; (2) by dismissing Whitetail’s trespass, slander of title, unjust enrichment and constructive trust claims asserted against the State; (3) by determining XTO had not breached its lease agreement by failing to pay royalties owed to Whitetail; (4) by determining XTO did not violate N.D.C.C. § 47-16-39.1; and (5) by dismissing Whitetail’s constructive fraud claim asserted against XTO. Because the North Dakota Supreme Court concluded there were quiet title claims asserted by Whitetail remaining unresolved, it dismissed the appeal. View "Whitetail Wave v. XTO Energy, et al." on Justia Law

Blayne Puklich and Elyse Puklich were the children of Stan Puklich, who owned and operated an automobile dealership before his death. The dispute arose from the parties’ ownership of various business interests they either purchased or received from their father. Puklich Chevrolet, Inc. (PCI) owned the automobile dealership. B&E Holdings owned the real estate where the dealership was located. Blayne and Elyse each owned interests in these entities, and Elyse had assumed management responsibilities for both. Blayne appealed, individually and derivatively on behalf of B&E Holdings, LLP, a judgment dismissing his breach of fiduciary duty claim against Elyse and END L.L.L.P. Elyse cross appealed, arguing the district court erred when it denied her motion for N.D.R.Civ.P. 11 sanctions. The court held Blayne’s claim, which alleged Elyse breached fiduciary duties by usurping a real estate opportunity, was res judicata but not frivolous. Finding no reversible error as to either claim, the North Dakota Supreme Court affirmed the trial court. View "Puklich v. Puklich, et al." on Justia Law

Northwest Landowners Association filed suit to challenge the constitutionality of North Dakota Senate Bill 2344, which related to subsurface pore space. The district court granted the Association’s cross-motion for summary judgment, concluding S.B. 2344 was unconstitutional under the state and federal takings clauses. The State and Continental Resources appealed the district court’s summary judgment order and amended judgment. On appeal, the State argued S.B. 2344 did not violate the takings clauses and did not constitute an unconstitutional gift, and that the district court misapplied N.D.R. Civ.P. 56 by failing to consider evidence submitted by the State. Continental Resources argued the court erred in analyzing the Association’s facial challenge, in determining pore space had value as a matter of law, and in denying Rule 56(f) discovery. The North Dakota Supreme Court concluded the district court erred in invalidating the entirety of S.B. 2344. The trial court’s judgment was affirmed to the extent that it declared certain portions unconstitutional, but reversed to the extent it declared the remainder of the bill inseparable and invalid. View "Northwest Landowners Association v. State, et al." on Justia Law

Elton Lovro appealed a judgment dismissing his complaint with prejudice after the district court granted summary judgment in favor of the City of Finley (“City”). Lovro owned a house and property in Finley, Steele County, North Dakota. In March 2020, the City’s water line connected to the curb stop leading to Lovro’s home broke. Water flowed onto the property, damaging Lovro’s driveway and basement. Lovro sued the City for negligence and gross negligence, alleging the damages were caused by the City’s failure to properly operate, maintain, repair, and inspect their water system. Lovro also sued the City for breach of contract based on the City’s failure to properly and safely deliver water to his home. The City responded by denying the allegations that it was negligent, grossly negligent or that its acts or omissions caused the damages. The City denied the existence of any contractual relationship between Lovro and the City. The City affirmatively alleged that it was immune from suit under chapter 32-12.1 of the North Dakota Century Code. Lovro argues the district court erred in granting summary judgment dismissing his claims because the ruling was premature and discovery was still ongoing. Finding no reversible error, the North Dakota Supreme Court affirmed the district court. View "Lovro v. City of Finley" on Justia Law

Blue Appaloosa, Inc., appealed a judgment affirming an Industrial Commission order determining it violated N.D. Admin. Code ch. 43-02-03 by beginning construction of a treating plant prior to obtaining a permit or filing a bond with the Commission. Finding no reversible error, the North Dakota Supreme Court affirmed. View "Blue Appaloosa v. NDIC" on Justia Law

Koch Construction, Inc.; Marilyn Koch, Personal Representative of the Estate of Michael P. Koch; and Koch Property Investments, Inc. (collectively “appellants”) appealed the judgment and amended judgment entered in favor of Toman Engineering Company (“Toman”). Michael Koch owned and operated Koch Construction and Koch Property Investments (“KPI”). Toman provided engineering services to Koch Construction on various projects, including designing a stormwater management system for the Koch Meadow Hills residential development project in Dickinson, North Dakota. Michael died in August 2017. The stormwater management system included a detention pond referred to as the Marilyn Way Stormwater Pond, which was the detention pond at issue in this case. In 2016, Janet Prchal, Dean Kubas, and Geraldine Kubas, owners of property near the Koch Meadow Hills development, sued the City of Dickinson and KPI for damages, alleging the development of Koch Meadow Hills caused water to drain and collect on their properties. The Prchal lawsuit was settled in September 2018, and the settlement required modifications to be made to the Marilyn Way Stormwater Pond before June 30, 2019. The reconstruction work on the detention pond occurred during the summer and fall of 2019. Toman served a summons and complaint on Koch Construction and Marilyn Koch, to collect unpaid amounts for engineering services Toman provided to the defendants in 2017. Toman filed the complaint in the district court in June 2019. The appellants argued the district court erred in deciding they committed intentional spoliation of evidence and dismissing their counterclaim as a sanction. After review of the district court record, the North Dakota Supreme Court concluded the district court abused its discretion when it dismissed the appellants’ counterclaim as a sanction for spoliation of evidence. Judgment was reversed and the matter remanded for a new trial. View "Toman Engineering Co. v. Koch Construction, et al." on Justia Law