Justia Real Estate & Property Law Opinion SummariesArticles Posted in North Dakota Supreme Court
Hartman, et al. v. Grager
Steve and Russell Hartman, as personal representatives of the estate of Ray Hartman (the “Estate”), appealed an amended judgment entered after a bench trial. The Estate argued Ray lacked the capacity to contract, no valid contract for the sale of his farmstead and farmland existed, Trent Grager owed rent for the 2017 farming season, and Ray did not gift a tractor to Grager. Grager cross-appealed, arguing he was entitled to compensation for the Estate’s wrongful occupation of the farm. The North Dakota Supreme Court affirmed in part, concluding the district court did not err in finding Ray was capable of contracting, the 2016 agreement was a valid contract for the sale of the farmstead and farmland, Grager had no obligation to pay rent in 2017, and the tractor was gifted. The Supreme Court reversed in part, concluding the 2017 document did not supplement or alter the terms of the 2016 agreement, and Grager was entitled to compensation for the Estate’s wrongful occupation of the farm. The case was remanded for the court to determine Grager’s damages for the Estate’s wrongful occupation. View "Hartman, et al. v. Grager" on Justia Law
Schulz v. Helmers
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
Bearce v. Yellowstone Energy Development
Daniel and Debra Bearce appealed the district court’s grant of summary judgment in favor of Yellowstone Energy Development, LLC. In June 2006, representatives of a business entity that would eventually become Yellowstone went to the home of Daniel and Debra Bearce seeking to purchase 170 acres of land owned by the Bearces. 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 the following 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. Yellowstone then negotiated a long-term lease with a third party to build an oil train loading facility on the Bearces’ land. In July 2010, Yellowstone sent a letter to the Bearces advising them $100,000 in “value” would be issued despite Yellowstone’s abandonment of the plan to build an ethanol plant. In December 2011, 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 3:1 multiplier. Units representing ownership interest in Yellowstone were allocated and placed on a ledger sometime after December 4, 2012. After receiving a “unit ledger” indicating their interest in Yellowstone would not receive the 3:1 multiplier, the Bearces objected. Despite the objection, Yellowstone refused to apply the 3:1 multiplier to the Bearces’ interest in Yellowstone. The Bearces sued Yellowstone, asserting claims for breach of fiduciary duty, fraudulent inducement, and breach of contract. On appeal, the Bearces argued the district court erred in concluding Yellowstone did not owe them a fiduciary duty and that, if a duty was owed, the Yellowstone Board of Directors did not breach its fiduciary duty. Finding no reversible error, the North Dakota Supreme Court affirmed the district court. View "Bearce v. Yellowstone Energy Development" on Justia Law
City of West Fargo v. McAllister, et al.
In August 2017, the City of West Fargo passed a resolution determining it was necessary to construct a sewer improvement project. The project consisted of the design and installation of two sewer pipes between West Fargo and Fargo. To complete the project, West Fargo had to acquire a right of way across certain private property, including Mark McAllister’s. McAllister appealed a judgment allowing the City of West Fargo to use its quick-take eminent domain power to acquire a right of way across his property. Because the North Dakota Supreme Court concluded the district court inappropriately granted the N.D.R.Civ.P. 54(b) order certifying the judgment as final, it dismissed the appeal. View "City of West Fargo v. McAllister, et al." on Justia Law
PLS Services v. Clear Creek Retirement Plan, et al.
PLS Services appealed a district court’s amended summary judgment dismissing its complaint against Valueplus Consulting, LLC, relating to a mortgage priority dispute. In February 2014, PLS was assigned two mortgages executed June 29, 2012, and recorded on July 10, 2012, against certain Williams County real property owned by Clear Creek Retirement Plan LLC. The mortgages and assignments to PLS contained incorrect legal descriptions and were therefore recorded in an errant tract index. Clear Creek and Valueplus executed a June 2012 purchase agreement whereby Valueplus agreed to purchase the subject property from Clear Creek. In January 2014, Fidelity Capital Services LLC assigned to Valueplus a mortgage against the subject property. The mortgage contained the correct legal description and was recorded in August 2013. In 2017, Valueplus sued Clear Creek to foreclose the mortgage. PLS moved to intervene, asserting its mortgages had priority. The district court denied PLS’s motion, and Valueplus subsequently purchased the subject property in June 2019. PLS sued Clear Creek, Valueplus, and others, alleging it had a superior interest in the subject property. PLS sought reformation and foreclosure of its mortgages. Valueplus denied the allegation and moved for summary judgment, arguing it purchased the property in good faith because it was unaware of PLS’s mortgages containing an incorrect legal description. PLS opposed Valueplus’ motion, asserting Valueplus was not a good faith purchaser. The district court granted Valueplus’ motion, concluding Valueplus was a good faith purchaser of the property and did not have actual knowledge or constructive notice of PLS’s mortgages. After review, the North Dakota Supreme Court concluded the district court did not abuse its discretion in certifying the summary judgment against PLS as final under N.D.R.Civ.P. 54(b), but that the trial court erred in granting summary judgment. Instead of addressing PLS’s request for additional discovery in its order granting summary judgment, the district court concluded an affidavit was “uncontradicted” and Valueplus had no actual knowledge of PLS’s mortgages. However, PLS did not have the opportunity to cross-examine the statements made in the affidavit or depose the affiant. View "PLS Services v. Clear Creek Retirement Plan, et al." on Justia Law
McDougall, et al. v. AgCountry Farm Credit Services, et al.
AgCountry Farm Credit Services, PCA appealed a district court judgment granting Michael and Bonita McDougall’s unjust enrichment claim and ordering AgCountry to pay $170,397.76. Kent and Erica McDougall were farmers and ranchers who began raising cattle in 2007. Michael and Bonita (collectively, “the McDougalls”) were Kent’s parents. In 2013, Kent and Erica began financing their operations through AgCountry.On various dates Kent and Erica obtained eight loans from AgCountry and signed promissory notes secured by real estate mortgages and security agreements. From fall of 2015 through March 2016, Kent and Erica repeatedly requested AgCountry restructure their loans and assist them in obtaining operating funds. Although Kent and Erica were in default on their loans with AgCountry, they signed a mortgage on the home quarter to AgCountry. When Kent and Erica were informed their request for restructuring was denied, they filed for bankruptcy. As part of the bankruptcy proceedings, Kent and Erica initiated an adversary action against AgCountry and the McDougalls. The complaint in the adversary action asserted a count for avoidance of transfer, for avoidance of the mortgage on the basis of fraud, and to determine the transfer of the home quarter back to the McDougalls from Kent and Erica was appropriate and nonavoidable. Then in 2018, the McDougalls sued AgCountry seeking a declaration that the mortgage on the home quarter was void and asserting claims of deceit, conversion, estoppel and unjust enrichment. AgCountry moved for summary judgment, arguing the McDougalls’ claims failed as a matter of law based on undisputed facts. AgCountry also argued the claims were barred by the prior judgment in Kent and Erica’s bankruptcy proceedings. Summary judgment was granted in favor of AgCountry dismissing the McDougalls’ claims of conversion, promissory estoppel, unjust enrichment and deceit and granting a declaration of superiority in AgCountry’s mortgage on the home quarter. The McDougalls appealed, and a trial ordered on their claims of deceit and unjust enrichment. The jury found in favor of AgCountry on the deceit claim, but in favor of the McDougalls on unjust enrichment. After review, the North Dakota Supreme Court directed the district court to modify the cost judgment, and affirmed as modified. View "McDougall, et al. v. AgCountry Farm Credit Services, et al." on Justia Law
City of Glen Ullin, et al. v. Schirado, et al.
Karen and Jerome Schirado appealed a judgment granting the City of Glen Ullin and the Glen Ullin Park District permanent injunctive relief and awarding the Park District attorney’s fees. The Schirados owned land near both Park District and City property. In 2013, the Park District sued the Schirados to enjoin them from fencing and allowing their horses to graze on Park District lots. The Park District was granted default judgment. In 2019, the Park District and the City sued again, alleging the Schirados violated the 2013 judgment. The suit contained claims similar to the 2013 suit, with additional claims involving the City’s streets and alleys which were not involved in the original action. The Schirados conceded they placed fencing on the properties and allowed their horses to graze, but alleged they were given permission by the City. The district court granted a preliminary injunction in favor of the City and the Park District. The court found the Schirados in contempt of court because of their violation of the 2013 judgment, and awarded attorney’s fees and costs to the City and the Park District. The North Dakota Supreme Court reversed the judgment in favor of the City, and reversed and remanded the fee award for the district court to explain its rationale for the award, including which amount is a sanction for contempt, and which portion is allocated to each plaintiff. On remand, the Schirados moved a new trial, claiming Karen Schirado possessed additional testimony and evidence “necessary to allow her to fully present her case.” The district court denied the motion for trial and concluded the Schirados had two opportunities to present evidence of an oral or written agreement to use the City property and failed to do so. The court granted the City’s motion for summary judgment, concluding the Schirados failed to present admissible evidence in resistance to the City and Park District’s motion for summary judgment. The court also granted the City and the Park District permanent injunctive relief and awarded the Park District $5,460.00 in attorney’s fees. The Schirados appeal from the amended judgment. Finding no reversible error in the amendment judgment, the North Dakota Supreme Court affirmed. View "City of Glen Ullin, et al. v. Schirado, et al." on Justia Law
Great Plains Royalty Corp. v. Earl Schwartz Co., et al.
Earl Schwartz Company and the co-personal representatives of the Estate of Earl N. Schwartz (amongst others, together “ESCO”) and SunBehm Gas, Inc. appealed a judgment quieting title to oil and gas interests in Great Plains Royalty Corporation. Great Plains cross appealed, arguing the district court erred when it denied its claims for damages. Great Plains’ creditors filed an involuntary petition for bankruptcy under Chapter 11 of the Bankruptcy Code in 1968. The case was converted to a Chapter 7 liquidation proceeding. The bankruptcy trustee prepared an inventory and published a notice of sale that listed various assets, including oil and gas interests. Earl Schwartz was the highest bidder. Schwartz entered into an agreement with SunBehm to sell certain interests described in the notice, and the district court order approved the transfer of those interests directly from the bankruptcy estate to SunBehm. The bankruptcy case was closed in 1974. Great Plains’ creditors were not initially paid in full; the bankruptcy case was reopened in 2013, Great Plains’ creditors were paid in full with interest, and adversary proceedings were brought to determine ownership of various oil and gas interests, to which ESCO was a party. ESCO argued the bankruptcy sale transferred all of the interests owned by Great Plains, regardless of whether they were listed in the notice of sale. The bankruptcy court rejected ESCO’s argument and determined title to various properties (not the subject of the present appeal). Then in 2016, Great Plains brought this quiet title action against ESCO and SunBehm; ESCO and SunBehm brought quiet title cross claims. The district court held a bench trial and found the bankruptcy trustee intended to sell “100%” of all of the oil and gas interests Great Plains owned at the time of the bankruptcy. But the North Dakota Supreme Court reversed, finding the district court erred when it determined the bankruptcy trustee intended to sell all of Great Plains’ interests, including those not listed in the notice of sale. On remand, ESCO and SunBehm claimed they held equitable title to oil and gas interests in various tracts identified in the notice of sale, interest which were confirmed by the bankruptcy court. The Supreme Court reversed the district court’s ruling on collateral estoppel as a misapplication of the law, and vacated the court’s title determination and its denial of Great Plains’ conversion claim. The case was remanded for the court to determine whether ownership of any interests in the tracts identified in the notice of sale passed to ESCO or SunBehm by virtue of the bankruptcy sale and confirmation order. View "Great Plains Royalty Corp. v. Earl Schwartz Co., et al." on Justia Law
Cass County Joint Water Resource District v. Aaland, et al.
Landowners Cash Aaland, Larry Bakko, and Penny Cirks, appealed orders granting the Cass County Joint Water Resource District (the “District”) a right of entry onto their properties to conduct surveys and examinations related to the Fargo-Moorhead Flood Diversion Project. The Landowners argued these surveys and examinations are beyond the scope of N.D.C.C. 32-15-06. After review, the North Dakota Supreme Court reversed, concluding the District’s right of entry exceeded the limited testing permitted under the statute. The matter was remanded for a determination on attorney’s fees and costs. View "Cass County Joint Water Resource District v. Aaland, et al." on Justia Law
Estate of Seidel v. Seidel, et al.
James Seidel, Troy Seidel, and Gravel Supply LLC (Defendants) appealed a judgment awarding the Estate of Leroy Seidel $68,958.75 relating to the Defendants’ sale of gravel from certain real property. Defendants argued Leroy Seidel did not own any gravel interests in the property because he had conveyed his interests to James Seidel in a 2008 warranty deed. After review, the North Dakota Supreme Court reversed and remanded, concluding Leroy Seidel indeed did not own any gravel or other surface mineral interests in the subject property. View "Estate of Seidel v. Seidel, et al." on Justia Law